Editor's Note:

Our short-term bias is bearish. If you're looking for bullish candidates then keep an eye on these stocks, which might be a buy on a breakout above resistance: AAP, SXCI, INTU



NEW DIRECTIONAL PUT PLAYS

Dow Jones Industrial ETF - DIA - close: 128.40 change: -1.32

Stop Loss: 130.65
Target(s): 125.00 and 122.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The market action over the past several days has taken a turn for the worse. The bull trend is broken, at least short-term, and stocks are poised for a deeper correction. The DIA broke support last Monday. The oversold bounce failed at resistance.

I am suggesting bearish put positions at the open on Monday morning. We will use a stop loss at $130.65. Please note that I am suggesting a short-term target at $125.00 and a longer-term, multi-week target at $122.00.

- Suggested Positions -

buy the May $127 PUT (DIA1219Q127) current ask $2.30

- or -

buy the May $124 PUT (DIA1219A124) current ask $1.42

Annotated Chart:

Entry on April xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 6.3 million
Listed on April 14, 2012


FedEx Corp. - FDX - close: 88.03 change: -1.81

Stop Loss: 90.55
Target(s): 85.05
Current Option Gain/Loss: + 0.0%
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The oversold bounce in FDX has reversed at resistance near $90.00 and its 10-dma. Shares already looked troubled with a bearish double top from the February and March peaks. There is potential support at $85.00 and its 200-dma near $84.60. I am suggesting we buy puts at the open on Monday and aim for $85.00. More aggressive traders could aim lower. FYI: The Point & Figure chart for FDX is bearish with a $78 target.

- Suggested Positions -

buy the May $85 PUT (FDX1219Q85) current ask $1.61

Annotated Chart:

Entry on April xx at $ xx.xx
Earnings Date 06/19/12 (unconfirmed)
Average Daily Volume = 2.5 million
Listed on April 14, 2012