NEW DIRECTIONAL PUT PLAYS

Xilinx, Inc - XLNX - close 26.17 change -0.27 stop 27.20

Company Description:
Xilinx, Inc. designs, develops and markets programmable platforms. These programmable platforms have components that include integrated circuits (ICs) in the form of programmable logic devices (PLDs); software design tools to program the PLDs; targeted reference designs; printed circuit boards, and intellectual property (IP) cores. In addition to its programmable platforms, Xilinx provides design services, customer training, field engineering and technical support.

Target(s): 25.40, 25.00
Key Support/Resistance Areas: 26.75, 25.60, 25.20, 24.00
Time Frame: 1 to 2 weeks

Why We Like It:
Semiconductor stocks have experienced a slew of recent downgrades and they keep coming as RBC cut its rating on XLNX to Sector Perform from Outperform. The semi's have been the worst performing sector over the past month and a broader market pullback should send the stocks in the sector back to retest their recent lows. If it weren't for the strong market today XLNX would probably have closed near our targets, but the intraday recovery is providing a second chance to enter short positions. I suggest readers initiate short positions at current levels and play for quick pullback of $0.80 to $1.20. If our targets are reached the estimated gain on the position is +50% to +75%.

Suggested Position: Buy October $26.00 PUT, current ask $0.68

Annotated chart:

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