NEW DIRECTIONAL PUT PLAYS

Deere & Co - DE - close: 80.21 change: -1.79

Stop Loss: 82.75
Target(s): 75.25, 71.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
Many of DE's technical indicators are at oversold levels and yet the stock still looks vulnerable to more selling pressure. DE has been trying to bounce from round-number support near $80 but it hasn't had any success. Aggressive traders may want to go ahead and buy puts now. I suspect that DE may just churn sideways near the $80.00 strike price until options expiration is over this week. However, if the market and DE continue to fall we want to be ready.

I am suggesting a trigger to launch bearish put positions at $79.25. If triggered at $79.25 we'll use a stop loss at $82.75. Our first target is $75.25. Our second, more aggressive target would be $71. FYI: The Point & Figure chart for DE is bearish with a $71 target.

Trigger @ $79.25

- Suggested Positions -

buy the July $75 PUT (DE1116S75) current ask $1.14

Annotated Chart:

Entry on June xxth at $ xx.xx
Earnings Date 08/17/11 (unconfirmed)
Average Daily Volume = 5.7 million
Listed on June 15th, 2011