NEW DIRECTIONAL PUT PLAYS

Joy Global Inc. - JOYG - close: 88.40 change: -3.84

Stop Loss: 94.25
Target(s): 85.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
Weakness in copper is signaling a potential top for some of the metal commodities and the mining-related stocks. Investors are worried the global economy might be slowing down with disappointing economic data out of China (possibly due to the Golden Week holiday) and elevated gasoline prices weighing on the consumer globally. Copper prices have actually created a bearish head-and-shoulders pattern. Meanwhile shares of JOYG have broken their long-term up trend at the 50-dma.

Aggressive traders could buy puts on JOYG now. Odds are the stock could see a little oversold bounce. I am suggesting a trigger to buy puts at $90.00. Nimble traders could try and time an entry point closer to the $92 level instead. Our target is $85.25. Aggressive traders could aim for the $84 lows or a drop closer to $80.

Trigger @ 90.00

- Suggested Positions -

Buy the April $85 puts (JOYG1116P85) current ask $3.15

Annotated Chart:

Entry on March xxth at $ xx.xx
Earnings Date 06/02/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on March 10th, 2010