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Play Editor's Note:

Jim recently said he was more prone to buy the dip than sell the rallies here. I happen to agree. Short-term we can probably do okay buying the dip but I think the dip has a little farther to fall before we want to buy it. While I have a very short-term bullish bias (after this dip is done) I still see some bearish candidates out there and I'm listing a couple of put plays tonight.


NEW DIRECTIONAL PUT PLAYS

Best Buy Inc. - BBY - close: 29.15 change: -0.54 stop: 30.25

Why We Like It:
The short-covering in electronics retailer BBY ran right to resistance near $30.00 and ran out of gas. I still think that the consumer is going to be a late to the economic recovery party and with savings rates rising BBY could see a long-road ahead of it. This is a short-term trade for a dip back toward $26-25.

Buy puts now with a stop loss above today's high. My first exit target is $25.50. FYI: We do not want to hold over the March 26th earnings report.

Suggested Options:
I am suggesting the April puts.

BUY PUT APR 30.00 BBY-PF open interest=2052 current ask $2.95
BUY PUT APR 27.50 BBY-PS open interest=4822 current ask $1.80
BUY PUT APR 25.00 BBY-PE open interest=19969 current ask $1.10

Annotated Chart:
BBY

Picked on    March 16 at $ 29.15
Change since picked:      + 0.00
Earnings Date           03/26/09 (unconfirmed)
Average Daily Volume =      11.9 million  
Listed on March 16, 2009         


Blackrock Inc. - BLK - close: 103.90 change: -4.10 stop: 110.50

Why We Like It:
Traders need to be nimble if you're going to attempt this play. The oversold bounce in BLK did manage to breakout back above the $100 mark but it stalled under its descending 50-dma. Today's failed rally looks like a bearish entry point. So why do we need to be nimble? If shares bounce too sharply from the $100 level we will probably want to exit early. I would expect some sort of bounce but look for it to roll over in the $104-106 region.

We're starting this play with a stop loss above today's high. Our first target is $90.50. BLK can be a volatile stock so consider this an aggressive trade.

Suggested Options:
I'm suggesting the April puts.

BUY PUT APR 100.0 BLK-PT open interest=1093 current ask $7.70
BUY PUT APR 95.00 BLK-PY open interest=  62 current ask $5.80
BUY PUT APR 90.00 BLK-PX open interest=  61 current ask $4.50

Annotated Chart:
BLK

Picked on    March 16 at $103.90
Change since picked:      + 0.00
Earnings Date           04/16/09 (unconfirmed)
Average Daily Volume =       908 thousand 
Listed on March 16, 2009         


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