Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trades:

ALK - this airline stock is showing relative strength. Falling oil prices is helping the industry. ALK is on the verge of breaking out past resistance near $72.00 to hit new record highs.

CMP - shares have fallen from $77 in early December to their late November lows near $69. A drop under today's low (68.88) might be a new bearish entry point. The stock is arguably short-term oversold here, which is a concern.

- James


NEW DIRECTIONAL PUT PLAYS

BMC Software Inc. - BMC - close: 33.33 change: -0.40

Stop Loss: 35.05
Target(s): 30.05
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
BMC is a software stock that has been building on a bearish trend of lower highs. Now shares are testing support near $33.00 and look poised to breakdown to new two-year lows. I am suggesting a trigger to open bearish put positions at $32.75. We'll start this trade with a wide stop at $35.05. More conservative traders may want to use a tighter stop loss instead. Our target is $30.50. FYI: The Point & Figure chart for BMC is bearish with a $29 target.

Trigger @ 32.75

- Suggested Positions -

buy the 2012Jan $32.50 PUT (BMC1221M32.5) ask $1.10

Annotated Chart:

Entry on December xx at $ xx.xx
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on December 14, 2011