NEW DIRECTIONAL PUT PLAYS

Sears Holding - SHLD - close: 70.99 change: -1.62 stop: 73.26

Why We Like It:
The retailers are losing steam. The sector had been hitting new 52-week highs just a few days ago but now they're poised to break support. Shares of SHLD did not set new highs last week but instead produced a lower high. Now SHLD is in danger of breaking significant support at the $70.00 level.

I am suggesting traders buy puts if SHLD hits $69.50. Use small positions at least 1/2 your normal trade size. If triggered our first target is $65.25. Our second target is $60.50.

Suggested Options:
I'm suggesting the 2010 January puts. My preference is the $65 strike although $70s would work well.

BUY PUT JAN 65.00 KTQ-MM open interest=4773 current ask $2.20

Annotated Chart:

Entry  on  December xx at $ xx.xx <-- TRIGGER @ 69.50 (small pos)
Change since picked:       + 0.00
Earnings Date            02/25/10 (unconfirmed)
Average Daily Volume =        1.6 million  
Listed on  December 08, 2009