NEW DIRECTIONAL PUT PLAYS

Leggett & Platt - LEG - close 20.88 change -0.55 stop 21.75

Company Description:
Leggett & Platt, Incorporated is an international manufacturer, which conceives designs and produces a range of engineered components and products found in many homes, offices, retail stores and automobiles. The Company’s operations are organized into 19 business units, which are divided into 10 groups under four segments: Residential Furnishings; Commercial Fixturing & Components; Industrial Materials; and Specialized Products.

Target(s): 19.85, 19.35, 18.70
Key Support/Resistance Areas: 21.50, 20.50, 19.80, 19.00, 18.50
Time Frame: 1 to 2 weeks

Comments:
We are back with a short play in LEG. LEG is in the furniture & fixtures industry and purchases of these types of items are not on the minds of consumers. The stock continues to make lower highs on a descending trend line that began on 4/30 and is now on the verge of breaking an upward trend line that began 7/6. On its daily chart LEG closed below all of its moving averages today and if the broader market gets moving to the downside LEG should be one of the first to go. I suggest we enter short positions if LEG trades to $21.20 (below today's highs and the 50-day SMA) or to $20.70 (below today's low), whichever occurs first. We have realistic targets that are easily achievable and will produce a good winning trade if they are reached.

Suggested Position: Buy September $20.00 PUT, current ask $0.60

Annotated chart:

Entry on August xx
Earnings: 10/21/10 (unconfirmed)
Average Daily Volume: 1.45 million
Listed on August 10, 2010