Editor's Note:

The S&P 500 has yet to break support but a lot of individual stocks are breaking down. You could throw darts at a wall of stock symbols and come away with more bearish candidates than bullish ones. I'm adding several candidates but don't try to play them all. Pick which ones look the most appealing to you.


NEW DIRECTIONAL PUT PLAYS

Autozone Inc. - AZO - close: 150.00 change: -2.76 stop: 155.25

Why We Like It:
The bounce in AZO is fading again and the failed rally at $154.00 late last week looks like a new entry point to buy puts. Shares have developed a bearish trend of lower highs and lower lows and the Point & Figure chart is forecasting a drop to $134. I'm suggesting bearish positions now with a stop at $155.25. Our first target is $141.00. Our second target is $132.50.

Suggested Options:
I am suggesting the August puts.

BUY PUT AUG 150 AZO-TJ open interest= 339 current ask $6.10
BUY PUT AUG 145 AZO-TI open interest= 167 current ask $4.10
BUY PUT AUG 140 AZU-TH open interest= 280 current ask $2.70

Annotated Chart:

Picked on     July 04 at $150.00
Change since picked:      + 0.00
Earnings Date           09/22/09 (unconfirmed)
Average Daily Volume =       1.0 million  
Listed on  July 04, 2009         


Costco - COST - close: 44.64 change: -1.15 stop: 46.10

Why We Like It:
You might think that wholesalers like COST would be doing better during these tough times as consumers try to save money. Yet the stock has been sinking almost the entire month of June and now COST is nearing support near $44.00. I'm suggesting readers buy puts at $43.90. If triggered our target is $40.25.

Suggested Options:
I am suggesting the August puts.

BUY PUT AUG 45.00 PRQ-TI open interest=2214 current ask $2.15
BUY PUT AUG 42.50 PRQ-TV open interest=1127 current ask $1.10
BUY PUT AUG 40.00 PRQ-TH open interest= 345 current ask .50

Annotated Chart:

Picked on     July xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           10/08/09 (unconfirmed)
Average Daily Volume =      4.75 million  
Listed on  July 04, 2009         


Freeport McMoran - FCX - close: 49.72 change: -0.85 stop: 53.01

Why We Like It:
The S&P 500 isn't the only one with a bearish head-and-shoulders pattern developing. FCX appears to be forming a right shoulder with last week's failed rally near $52.00. I'm suggesting put positions now. FCX should have support near $45.00 so we're setting our first target at $45.25. Our second target is $41.00. FCX can be somewhat volatile so we're setting the stop at $53.01. I do consider this a higher-risk trade. If the dollar retreats commodities should rise, which should benefit the miners although that relationship may not hold up short-term. The Point & Figure chart has turned bearish with a $36 target.

Suggested Options:
I am suggesting the August puts.

BUY PUT AUG 50.00 FCX-TJ open interest=4460 current ask $4.90
BUY PUT AUG 45.00 FCX-TI open interest=4956 current ask $2.62
BUY PUT AUG 40.00 FCX-TH open interest=5315 current ask $1.22

Annotated Chart:

Picked on     July 04 at $ 49.72
Change since picked:      + 0.00
Earnings Date           07/22/09 (unconfirmed)
Average Daily Volume =        18 million  
Listed on  July 04, 2009         


MetLife Inc. - MET - close: 28.04 change: -1.72 stop: 30.35

Why We Like It:
MET's bullish trend has broken and shares are now suffering under a new trend of lower highs. Last week MET spent days failing near $30.00 and its 200-dma. I'm suggesting put positions now or on a bounce back toward $29.50-30.00. Our first target is $25.25. Our second target is $21.75.

Suggested Options:
I am suggesting the August puts.

BUY PUT AUG 30.00 MET-TF open interest= 485 current ask $3.50
BUY PUT AUG 27.00 MET-TH open interest= 294 current ask $1.95
BUY PUT AUG 25.00 MET-TE open interest=2186 current ask $1.20

Annotated Chart:

Picked on     July 04 at $ 28.04
Change since picked:      + 0.00
Earnings Date           07/30/09 (unconfirmed)
Average Daily Volume =       7.4 million  
Listed on  July 04, 2009         


NII Holdings - NIHD - close: 18.61 change: -0.98 stop: 20.10

Why We Like It:
The trend is turning bearish for this foreign mobile telecom provider. NIHD filled the gap from June 22nd but the bounce failed at $20.00 and its 200-dma. Now shares have broken their bullish trend and technical support at the 50-dma. I'm suggesting put positions now or on a bounce back toward the $19.50 region. Our first target is $16.15.

Suggested Options:
I am suggesting the August puts.

BUY PUT AUG 20.00 QHQ-TD open interest= 601 current ask $2.50
BUY PUT AUG 17.50 QHQ-TW open interest= 137 current ask $1.25

Annotated Chart:

Picked on     July 04 at $ 18.61
Change since picked:      + 0.00
Earnings Date           07/23/09 (unconfirmed)
Average Daily Volume =       2.9 million  
Listed on  July 04, 2009         


Weyerhaeuser - WY - close: 29.51 change: -1.26 stop: 31.51

Why We Like It:
Commodity stocks of all types are breaking down. The oversold bounce in WY has failed near $31.00 and Thursday's break under round-number support at $30.00 looks like a new entry point to buy puts. I'm suggesting positions now with a stop at $31.51. Our first target is $26.00. Our second target is $23.00. The P&F chart points to a $24 target.

Suggested Options:
I am suggesting the August puts.

BUY PUT AUG 30.00 HYW-TC open interest= 97  current ask $2.50
BUY PUT AUG 28.00 HYW-TE open interest=193  current ask $1.55
BUY PUT AUG 25.00 HYW-TY open interest= 72  current ask .70

Annotated Chart:

Picked on     July 04 at $ 29.51
Change since picked:      + 0.00
Earnings Date           07/31/09 (unconfirmed)
Average Daily Volume =       2.1 million  
Listed on  July 04, 2009