NEW DIRECTIONAL PUT PLAYS
Check Point Software - CHKP - close: 52.93 change: -0.73
Stop Loss: 56.11
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below
Why We Like It:
Stocks look vulnerable here. The early tone from Europe regarding the EU summit is not positive. If the Europeans fail to deliver some sort of progress tomorrow then stocks are likely to plunge. We like CHKP because the trend has already turned bearish. Big picture this stock has a large bearish double top pattern with the peaks in July and October. In the last few weeks CHKP has built a bear-flag pattern and recently broke down under its simple and exponential 200-dma.
I am suggesting new bearish positions tomorrow morning with a stop loss at $56.11, just above the recent high near $56.00. There is potential support near $51.00 but we're aiming for the $48.00 level. More aggressive traders could aim lower.
FYI: The Point & Figure chart for CHKP is bearish with a $46 target.
- Suggested Positions -
buy the Jan $50 PUT (CHKP1221M50) ask $1.25
Entry on December xx at $ xx.xx
Earnings Date 01/30/12 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on December 08, 2011