NEW DIRECTIONAL PUT PLAYS

Deere & Co. - DE - close 54.50 change -0.71 stop 60.05

Company Description:
Deere & Company, together with its subsidiaries (John Deere) operates in three business segments: agriculture and turf segment, construction and forestry segment, and credit segment. The agriculture and turf segment, created by combining the former agricultural equipment and commercial and consumer equipment segments, manufactures and distributes a range of farm and turf equipment, and related service parts. The construction and forestry segment manufactures, distributes to dealers and sells at retail machines and service parts used in construction, earthmoving, material handling and timber harvesting. The credit segment finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment. In addition, it provides wholesale financing to dealers of the foregoing equipment, provides operating loans, finances retail revolving charge accounts, offers crop risk mitigation products and invests in wind energy generation.

Target(s): 53.25, 51.75, 50.25, 49.05
Key Support/Resistance Areas: 60.00, 57.50, 56.50, 56.00, 54.00, 52.70, 51.50
Time Frame: 1 to 2 weeks

Why We Like It:
Last week DE broke below its 20-day, 50-day, and 100-day SMA's and a trend line that began in August of 2009. The stock traded all the way down to its 200-day SMA on Thursday and Friday where I expect it bounce. I suggest readers enter short positions on strength in the stock. I've chosen $55.75 as an entry trigger. Depending on the strength of any bounces readers may also consider waiting until the $56.50 to $57.50 area prior to initiating short positions (see rectangle on chart). This area is below the 20-day and 50-day SMA's which should be the extent of any bounces in the stock. I'm just not sure DE will bounce that high which is why I have chosen $55.75. We'll use a wide stop at $60.05 and will adjust it after we are in the position. Our primary target is $51.75 but I have offered several other targets readers can us as a guide to tighten stops or simply take profits if things move in our direction.

Suggested Position: Buy August $55.00 PUTS if DE trades to $55.75, current ask $3.80, estimated ask at entry 3.15

Annotated chart:

Entry on July xx
Earnings 8/18/2010 (unconfirmed)
Average Daily Volume: 5.4 million
Listed on July 3, 2010


Starbucks Corp. - SBUX - close 24.35 change -0.31 stop 26.31

Company Description:
Starbucks Corporation, together with its subsidiaries (Starbucks) is the roaster and retailer of specialty coffee. It purchases and roasts whole bean coffees and sells them, along with fresh, rich-brewed coffees, Italian-style espresso beverages, cold blended beverages, a range of food items, a selection of premium teas, and beverage-related accessories and equipment, through Company-operated retail stores. Starbucks also sells coffee and tea products and licenses its trademark through other channels such as licensed retail stores and, through certain of its licensees and equity investees, Starbucks produces and sells a range of ready-to-drink beverages. The Company operates in three business segments: United States (US), International and Global Consumer Products Group (CPG).

Target(s): 23.70, 22.55, 21.30
Key Support/Resistance Areas: 26.50, 26.00, 25.25, 24.80, 24.00, 23.60, 22.50
Time Frame: 1 to 2 weeks

Why We Like It:
Last week SBUX broke below a trend line that began in October 2009 and collapsed below it 20-day, 50-day, and 100-day SMA's. These SMA's (in particular the 100-day SMA) have been key areas where the stock has bounced during its rally over the past year. And now that the stock is below them it has probably seen its best days, at least for awhile. I would like to use a trigger of $24.75 to enter short positions which is below the stock's 100-day SMA, the underside of the broken trend line, and the recent steep downtrend line, all of which are converging (see oval on chart). The $25.00 area could also be considered an entry point but I chosen $24.75 because it is near Friday's highs which could possibly form a double top on the intraday charts. Our primary target is $22.55 but I have also listed $23.70 as area to consider tightening stops. It is above the 200-day SMA which SBUX has not touched in over a year.

Suggested Position: August $25.00 PUTS, current ask $1.82, estimated ask at entry $1.60

Annotated chart:

Entry on June xx
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on July 3, 2010