Editor's Note:

In addition to tonight's new candidates, the following stocks look like bearish trades right now:

SLX, AGP, MMM, and DE

If you're looking for more bearish candidates you may want to consider the following:

IYT, BWA, TECD, RIG, DVN, MUR, DIG, EMN, FDX, LLL, GD, XLE, CMP, OXY, and SLG

If you're looking for a generic bet on the market then consider puts on the DIA or the SPY.

- James


NEW DIRECTIONAL PUT PLAYS

iShares Russell 2000 ETF - IWM - close: 64.30 change: -2.03

Stop Loss: 67.55
Target(s): 60.50, 57.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The stock market looks very, very vulnerable to more selling pressure. The major indices, including the Russell 2000 index, have built multiple bearish technical sell patterns. If the market does breakdown then the small caps should underperform. That's why we're suggesting puts on the IWM.

I am suggesting new bearish positions now. More conservative traders may want to wait for a new relative low under $63.49 before initiating positions. I am listing our targets at $60.50 and $57.00. We do want to keep our position size small. The market remains volatile.

- Suggested Positions - (Small Positions)

buy the OCT $60 PUT (IWM1122V60) current ask $1.78

- or -

buy the NOV $60 put (IWM1119W60) current ask $3.17

Annotated Chart:

Entry on October 03 at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 83.2 million
Listed on October 01, 2011


Panera Bread Co. - PNRA - close: 103.94 change: -3.74

Stop Loss: 108.55
Target(s): 98.00, 92.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Investors are growing concerned that the U.S. consumer is cutting back and spending less. Some of the restaurant stocks are starting to take a hit. You can see on PNRA's daily chart that the oversold bounce was not able to rally past the 61.8% Fibonacci retracement of the sell-off. Now the stock is breaking down from its trading range. Friday's drop and failure near $108 looks like a new entry point to buy puts.

I am suggesting bearish positions now. Conservative traders may want to exit and take profits near $100. I am listing two targets. Our first target is $98.00. Our second target is $92.50. The August low near $97 could be support so don't be surprised to see a bounce.

The Point & Figure chart for PNRA is bearish with am $88 target. FYI: I do need to caution readers that the most recent data listed short interest at about 10% of PNRA's small float of approximately 28 million shares. That's above average short interest and a widespread market bounce could spark some short covering.

- Suggested Positions -

buy the OCT $100 PUT (PNRA1122V100) current ask $3.60

- or -

buy the NOV $95 PUT (PNRA1119W95) current ask $4.60

Annotated Chart:

Entry on October 03 at $ xx.xx
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 574 thousand
Listed on October 01, 2011


Pioneer Natural Res. - PXD - close: 65.77 change: -2.73

Stop Loss: 71.01
Target(s): 60.50, 56.00
Current Option Gain/Loss: +0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The energy sector is breaking down on worries of a global slow down. Shares of PXD are helping lead the way lower. The stock's recent oversold bounce has failed once it filled the gap and now PXD hit new lows on Friday. I am suggesting we launch small bearish positions now. I caution you to keep positions small to limit our risk since the energy sector can be a little volatile.

I am suggesting new bearish positions right now with a stop loss at $71.01, which is just about 10 cents above Thursday's high. Our first target is $60.50. Our secondary target is $56.00 but that could take a few weeks.

The Point & Figure chart for PXD is bearish with a $51 target.

- Suggested Positions - (Small Positions)

buy the OCT $60 PUT (PXD1122V60) current ask $2.00

- or -

buy the NOV $60 PUT (PXD1119W60) current ask $3.90

Annotated Chart:

Entry on October 03 at $ xx.xx
Earnings Date 11/01/11 (confirmed)
Average Daily Volume = 1.8 million
Listed on October 01, 2011