NEW DIRECTIONAL PUT PLAYS

Freeport McMoRan Copper & Gold - FCX - close 64.36 change +3.61 stop 68.80

Company Description:
Freeport-McMoRan Copper & Gold Inc. (FCX), through its wholly owned subsidiary, Phelps Dodge Corporation (Phelps Dodge) is a copper, gold and molybdenum mining company. Its portfolio of assets includes the Grasberg minerals district in Indonesia, which contains the single recoverable copper reserve and the single gold reserve; mining operations in North and South America, and the Tenke Fungurume minerals district in the Democratic Republic of Congo (DRC). FCX also operates Atlantic Copper, its wholly owned copper smelting and refining unit in Spain. As of December 31, 2009, consolidated recoverable proven and probable reserves totaled 104.2 billion pounds of copper, 37.2 million ounces of gold, 2.59 billion pounds of molybdenum, 270.4 million ounces of silver and 0.78 billion pounds of cobalt.

Target(s): 58.30, 55.20, 52.10
Key Support/Resistance Areas: 66.00, 65.00, 64.00, 58.00, 55.00, 52.00
Time Frame: 1 weeks

Why We Like It:
FCX gapped above our entry this morning. When that happens we turn to the 15 or 30 minute range to determine whether or not to initiate positions. Since FCX did not break below either of these ranges we stayed on the sidelines. However, I still like the short play and this gives us a better risk/reward set-up. The stock is approaching its downward trend line and its declining 20-day SMA. There is formidable resistance in the $65 to $66 area that I think may act as a stone wall for FCX to continue its down move. Let's use the $65.00 to $66.00 area to initiate short positions. Ideally the declining 20-day SMA is desired. Our initial stop will be $68.80 but we will be quick to adjust it once we are in the position. I'm also adjusting the strike price up to July $60.00 PUTS. I view this trade as aggressive and quick so proper position size should be used to limit risk. I am also choosing an out of the money option to limit capital at risk.

Suggested Position: Buy July $60.00 PUT if FCX trades up near $65.00, current ask $2.62, estimated ask at entry $2.40.

Annotated chart:

Entry on June xx
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 19 million
Listed on June 10, 2010


Altera Corp - ALTR - close 23.66 change +0.81 stop 24.25

Company Description:
Altera Corporation (Altera) is a semiconductor company. The Company designs, manufactures and markets programmable logic devices (PLDs), HardCopy application-specific integrated circuits (ASICs), pre-defined design building blocks, known as intellectual property (IP) cores, and associated development tools. Altera is a supplier of complementary metal oxide semiconductor (CMOS) PLDs. The Company’s PLDs consist of field-programmable gate arrays (FPGAs) and complex programmable logic devices (CPLDs), which are semiconductor integrated circuits, or chips, that its customers program to perform logic functions in their electronic systems. Its HardCopy ASICs enables its customer transition designs from FPGAs to non-programmable implementations. Altera’s IP cores can be licensed by customers to add functions to their PLD designs.

Target(s): 22.60
Key Support/Resistance Areas: 24.15, 23.80, 23.15
Time Frame: 1 to 2 weeks

Why We Like It:
ALTR is coming into resistance at the $23.80 level and may also be forming a bearish head and shoulders pattern. I like the semiconductor space to reverse lower and ALTR should follow. I suggest readers initiate short positions at current levels or an any strength in the stock. Our targets are $22.60 and $22.00. We'll use an initial stop $24.25 which sets up a good risk/reward if we are wrong. We will either be right or right out of the trade.

Suggested Position: July $25.00 PUTS, current ask $1.30

Annotated chart:

Entry on June xx
Earnings 7/20/2010 (unconfirmed)
Average Daily Volume: 9.7 million
Listed on June 10, 2010


SPDR S&P 500 ETF - SPY - close 109.15 change +3.10 stop 111.50

Company Description:
SPDR S&P 500 ETF (the Trust), formerly SPDR Trust, Series 1, generally corresponds to the price and yield performance of the S&P 500 Index. The S&P 500 Index consists of 500 selected stocks, all of which are listed on the exchange, the NYSE or NASDAQ, and spans over 24 separate industry groups.

Target(s): 105.00, 103.50, 102.25
Key Support/Resistance Areas: 111.oo, 110.00, 109.00, 108.00
Time Frame: 1 to 2 weeks

Why We Like It:
SPY is approaching its 20-day SMA and resistance from below, along with a downtrend line that has yet to be shallenged touched. All of this will make it difficult for the index to overcome. I suggest readers initiate short positions at current levels or on any strength in the index. This gives us a good reference point to place stop just above at 111.50 and we will be right out of the trade if we are wrong.

Suggested Position: July $109.00 PUTS, current ask $3.93

Annotated chart:

Entry on June xx
Earnings N/A (unconfirmed)
Average Daily Volume: 340 million
Listed on June 10, 2010