NEW DIRECTIONAL PUT PLAYS

Coinstar, Inc. - CSTR - close: 44.28 change: -0.67

Stop Loss: 46.60
Target(s): 40.25
Current Option Gain/Loss: + 0.0%
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of CSTR are suffering with a long-term trend of lower highs. On a shorter-term basis the stock has been stuck under significant resistance in the $46-48 zone. Now it appears to be breaking down.

I am suggesting bearish positions now (tomorrow morning) with a stop loss at $46.60. Our exit target is $40.25. I do want to point out that the larger trend for CSTR is suggesting a long-term target in the $25.00 area. If you've got the patience then consider aiming for the $27-25 zone over the next three or four months. The real signal will be a breakdown under significant support in the $38.50-37.50 zone.

NOTE: I have to warn you that being short CSTR is a popular trade. The most recent data listed short interest at almost 45% of the very small 28.2 million-share float. Any unexpected surge higher could produce a short squeeze. We will want to keep our position size small to limit our risk.

FYI: The Point & Figure chart for CSTR is bearish with a $34 target.

*Open positions now* (SMALL Positions)

- Suggested Positions -

buy the Jan $45 PUT (CSTR1221M45) current ask $2.35

Annotated Chart:

Entry on January 05 at $ xx.xx
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 846 thousand
Listed on January 04, 2012


LinkedIn Corp. - LNKD - close: 61.79 change: -2.33

Stop Loss: 62.55
Target(s): 51.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The flash from LNKD's IPO has faded and the stock has been struggling with a trend of lower highs and lower lows. The company still has tens of millions of shares locked up in a secondary offering that will come to market in mid February. All of this extra supply is going to be tough on the stock price.

Currently LNKD is trading above support near $60.00. I am suggesting we open small bearish positions with a trigger at $59.75. Our exit target is $51.50. FYI: The Point & Figure chart for LNKD is bearish with a $55 target.

Trigger @ 59.75 (small positions)

- Suggested Positions -

buy the Jan $57.50 PUT (LNKD1221M57.5)

Annotated Chart:

Entry on January xx at $ xx.xx
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on January 04, 2012