Editor's Note:

In addition to tonight's new candidates there were plenty of stocks that look like put candidates. We did not have room for all of them. If you're looking for bearish trades then take a look at these symbols:

JOYG, XEC, APOL, BWA, CMP, UNP, FDX, OXY, MUR, GD, FISV, CVX, and BA

I would also keep an eye on Monsanto (MON). A breakdown under $62.00 could be an entry point for bearish positions.

- James


NEW DIRECTIONAL PUT PLAYS

Flowserve Corp. - FLS - close: 77.90 change: -2.73

Stop Loss: 82.75
Target(s): 71.00, 66.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
FLS has been trading in a bearish down trend since the double top back in April. You can see on the chart below that FLS has recently broke down from another multi-week sideways consolidation into what looks like a new leg lower. This pattern would suggest a $60 target. Meanwhile FLS also has a bearish head-and-shoulders pattern, which would suggest a target of $65.00.

The oversold bounce has failed near the $82.00-82.50 area. I am suggesting we take advantage of this reversal and buy puts now. We'll use a stop loss at $82.75. Our first target is $71.00. Our secondary, more aggressive target is $66.00.

- Suggested Positions -

buy the OCT $75 PUT (FLS1122V75) current ask $3.40

- or -

buy the NOV $70 PUT (FLS1119W70) current ask $3.80

Annotated Chart:

Entry on September 29 at $ xx.xx
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 721 thousand
Listed on September 28, 2011


Regal-Beloit - RBC - close: 47.95 change: -2.86

Stop Loss: 51.55
Target(s): 43.50, 40.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
RBC is another industrial name that is underperforming the market. The stock sold off hard last week. Now after a few days of hovering near support shares are breaking down to new 52-week lows. I am suggesting bearish positions now with a stop loss at $51.55. More aggressive traders may want to put their stop above yesterday's high, which was $52.91 instead. Our targets are $43.50 and $40.50. FYI: The Point & Figure chart for RBC is bearish with a $38 target.

Warning! The option spreads are a little wide. We want to keep our position size small to limit our capital at risk.

- Suggested Positions -

buy the OCT $45 PUT (RBC1122V45) current ask $1.70

- or -

buy the NOV $45 PUT (RBC1119W45) current ask $2.60

Annotated Chart:

Entry on September xx at $ xx.xx
Earnings Date 11/02/11 (unconfirmed)
Average Daily Volume = 456 thousand
Listed on September 28, 2011