NEW DIRECTIONAL PUT PLAYS

Green Mtn Coffee - GMCR - close: 79.92 change: -0.75 stop: 82.55

Why We Like It:
The market is starting to correct and the selling pressure is building. If investors start to feel that the rally is over stocks like GMCR, which hit new highs just a few days ago, could be big targets for profit taking. Technically GMCR appears to have formed a top in the last week. I am suggesting a trigger to buy puts at $78.45, just under today's low. If triggered our first target is $75.10. Our second target is $70.50. GMCR is a volatile stock. I would use small positions to limit your risk.

Our time frame is just a few days. GMCR is due to report earnings on January 28th and we do not want to hold over the report.

Suggested Options:
I'm suggesting the February puts. My preference is for the $75 strike.

BUY PUT FEB 75.00 QGM-NO open interest=2924 current ask $3.10

Annotated Chart:

Entry  on   January xx at $ xx.xx <-- TRIGGER @ 78.45
Change since picked:       + 0.00
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =        1.4 million  
Listed on   January 21, 2010         


Mettler Toledo Intl. - MTD - close: 100.17 change: -0.65 stop: 102.25

Why We Like It:
MTD makes medical instruments and supplies. The stock topped out around $106 in late December. Since that time shares have broken a couple of key levels of support. Now MTD is flirting with a breakdown under round-number support near $100. Further weakness from here could herald a significant move down.

I am suggesting a trigger to buy puts at $99.40, which is under the early January low. If triggered our first target is $95.25 even though the 100-dma might offer some support. Our second target is $90.50. Our time frame is a couple of weeks. We do not want to hold over the early February earnings report.

Suggested Options:
I am suggesting the February puts. My preference is the $95 strike. The spreads are a little bit wide, which makes this a slightly more aggressive trade.

BUY PUT FEB 95.00 MTD-NS open interest=141  current ask $1.35

Annotated Chart:

Entry  on   January xx at $ xx.xx <-- TRIGGER @ 99.40
Change since picked:       + 0.00
Earnings Date            02/04/10 (unconfirmed)
Average Daily Volume =        134 thousand 
Listed on   January 21, 2010