NEW DIRECTIONAL PUT PLAYS

Fossil, Inc. - FOSL - close: 79.36 change: -2.76

Stop Loss: 83.05
Target(s): 73.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
FOSL produces a wide assortment of fashion accessories. Unfortunately it seems that owning shares of FOSL is becoming unfashionable. The stock has been struggling with a bearish trend of lower highs. Friday saw shares breakdown under key support near $80.00.

I am suggesting we buy put options at the open. We'll use a stop at $83.05. Our target is $73.50. More conservative traders may want to exit in the $75 area instead. FYI: The Point & Figure chart for FOSL is bearish with a $71 target.

- Suggested Positions -

buy the 2012Jan $75 PUT (FOSL1221M75) ask $1.55

Annotated Chart:

Entry on December xx at $ xx.xx
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on December 31, 2011


Tractor Supply Company - TSCO - close: 70.15 change: -1.20

Stop Loss: 72.55
Target(s): 65.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes

Company Description

Why We Like It:
The up trend in TSCO could be in serious trouble. The stock has a short-term bearish trend of lower highs and has been testing support near $70.00. The bullish pattern of higher lows is on the verge of getting broken.

I am suggesting we use a trigger at $69.50 to buy puts. We will aim for a drop to $65.50 but more aggressive traders may want to aim for the $62-60 zone instead.

Trigger @ 69.50

- Suggested Positions -

buy the Jan $70 PUT (TSCO1221M70) ask $2.00

Annotated Chart:

Entry on December xx at $ xx.xx
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 550 thousand
Listed on December 31, 2011