NEW DIRECTIONAL PUT PLAYS

Dollar Tree - DLTR - close: 79.66 change: -0.12

Stop Loss: 82.65
Target(s): 75.10
Current Option Gain/Loss: +0.0%
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The one-dollar stores are underperforming the market. Shares of DLTR have been consolidating sideways for three weeks yet the market has been surging higher. If DLTR can't rally on a day like today, then what are traders waiting for? We think it's poised for a breakdown.

More conservative traders may want to use a trigger under $78.50 to buy puts. We are suggesting readers buy puts now at the open tomorrow morning with a stop loss at $82.65. Our target is $75.10. More aggressive traders could aim for the 100-dma instead.

*Buy Puts at the Open*

- Suggested Positions -

buy the NOV $80 put (DLTR1119W80) current ask $2.60

Annotated Chart:

Entry on October 28 at $ xx.xx
Earnings Date 11/17/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on October 27, 2011


Shutterfly, Inc. - SFLY - close: 42.57 change: -4.06

Stop Loss: 48.05
Target(s): 35.25
Current Option Gain/Loss: +0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Not only does SFLY have a bearish trend of lower highs and lower lows but the stock also recently failed at its 200-dma. Now shares are selling off on negative earnings news. SFLY reported earnings last night. The company beat estimates by 2 cents and beat the revenue estimate. Yet guided Q4 earnings lower. Recent weakness has also created a new Point & Figure chart sell signal with a $34 target.

We are suggesting bearish put positions now. More nimble traders could wait for a bounce back toward $45 as their entry point instead. The $40 level could offer potential support but we're aiming for $35.25 as our exit target.

- Suggested Positions -

buy the NOV $40 PUT (SFLY1119W40) current ask $1.00

Annotated Chart:

Entry on October 28 at $ xx.xx
Earnings Date 10/26/11 (confirmed)
Average Daily Volume = 1.1 million
Listed on October 27, 2011