Editor's Note:

FYI: Aggressive traders may want to check out HIG as a potential bearish candidate. The stock has almost doubled in the last four weeks surging from $10.00 to over $19.00. The $20.00 level has been resistance in the past and shares stalled at their exponential 200-dma on Friday. This was a little too hot for me to add to the play list but readers may want to speculate with some puts. It wouldn't surprise me to see HIG correct with a $3.00 or $4.00 pull back.


NEW DIRECTIONAL PUT PLAYS

Intl.Business Machines - IBM - cls: 119.33 change: +1.95 stop: 120.55

Why We Like It:
The market is breaking out to new highs on the jobs report but IBM can't get past resistance at $120.00. If the jobs number won't do it, what will push IBM higher? I suspect nothing. The stock rallied toward $120 and began to fade lower. This looks like an entry point for an aggressive put play. Conservative traders can stick their stop loss at $120.10. I want to give the stock just a little more room to avoid being stopped out on a minor spike above resistance. Our first target to take profits is at $113.75, which is just above the top of the gap from mid July. Our second and final target is $111.25, which is near the bottom of the gap.

FYI: If IBM does fill the gap it may turned into a bullish candidate.

Suggested Options:
I am suggesting the August or September puts. This should be a very quick trade but bear in mind that August options expire in two weeks.

BUY PUT AUG 120 IBM-TD open interest=4132 current ask $2.45
BUY PUT AUG 115 IBM-TC open interest=9410 current ask .80

BUY PUT SEP 120 IBM-UD open interest= 836 current ask $4.10
BUY PUT SEP 115 IBM-UC open interest=3159 current ask $2.20

Annotated Chart:

Picked on   August 08 at $119.33
Change since picked:      + 0.00
Earnings Date           10/08/09 (unconfirmed)
Average Daily Volume =       7.9 million  
Listed on August 08, 2009         


Intercontintental Exchange - ICE - cls: 93.60 change: +1.46 stop: 98.25

Why We Like It:
ICE has been struggling under fears of over regulation by the government. The stock's oversold bounce is beginning to fade and I suspect the stock will drop toward support near $80.00 and its 200-dma. The plan is to buy half our put position now and then buy the second half when ICE breaks support at $90.00. We'll use a trigger at $89.85 to fill the second half. ICE can be a very volatile stock so we should consider this an aggressive trade. Our target to exit is $83.75. More aggressive traders can aim lower.

Suggested Options:
Once ICE begins to move it will probably move fast. I'm suggesting the August and September puts but readers need to remember that August options expire in two weeks.

BUY PUT AUG 90.00 ICE-TR open interest=2275 current ask $2.40
BUY PUT AUG 85.00 ICE-TQ open interest=2192 current ask $1.05

BUY PUT SEP 90.00 ICE-UR open interest= 973 current ask $5.10
BUY PUT SEP 85.00 ICE-UQ open interest= 814 current ask $3.30

Annotated Chart:

Picked on   August 08 at $ 93.60 Buy Half Now   
Picked on   August xx at $ xx.xx <-- TRIGGER @ 89.85 for 2nd half
Change since picked:      + 0.00
Earnings Date           10/29/09 (unconfirmed)
Average Daily Volume =       2.1 million  
Listed on August 08, 2009         


Shanda Interactive - SNDA - close: 47.83 chg: -2.29 stop: 51.25

Why We Like It:
After a stellar run in the first half of 2009 the trend has reversed for SNDA. Shares produced a bearish double top and now they're breaking down under support near $50.00. The stock's oversold bounce has been unable to break the $51.00 level for the last few days providing us a clear level of resistance to place our stop loss. No doubt about it SNDA is a volatile stock so readers may want to use smaller position sizes. Shares should see support near $45.00 and again at $40.00. I am targeting a drop into the $41.50-40.00 zone.

Important Trading Note: The Asian markets will probably pop higher on Monday morning as they react to the better than expected U.S. jobs report. However, I'm expecting the rally to fade. Readers may want to wait 30 to 60 minute on Monday morning to see where SNDA opens before launching new put positions. This is a Chinese company and will react to trading back home (watch the Shanghai index).

Suggested Options:
More aggressive traders could try the August puts. I'm suggesting the September puts.

BUY PUT SEP 50.00 QKU-UJ open interest=2302 current ask $6.40
BUY PUT SEP 45.00 QKU-UI open interest=2976 current ask $3.70
BUY PUT SEP 40.00 QKU-UH open interest=2296 current ask $1.75

Annotated Chart:

Picked on   August 08 at $ 47.83
Change since picked:      + 0.00
Earnings Date           09/01/09 (unconfirmed)
Average Daily Volume =       1.5 million  
Listed on August 08, 2009