Editor's Note:

We were planning to add JOY as a bearish candidate if shares broke down under $58.50 but the company is due to report earnings tomorrow morning before the opening bell. The stock will likely gap open one way or the other tomorrow. Nimble traders may want to keep an eye on it.


NEW DIRECTIONAL PUT PLAYS

Goldman Sachs Group - GS - close: 94.61 change: -3.25

Stop Loss: 97.55
Target(s): 88.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
GS is one of the largest investment banks in the world and probably the most infamous one. This stock, along with the financial sector, appears to be breaking down from the recent sideways consolidation.

I am suggesting small bearish positions if GS can trade at $93.90. If triggered we'll use a stop at $97.55. Our target is $88.50 but more conservative traders may want to exit at $90.00 instead. I do consider this an aggressive, higher-risk trade. GS can be a volatile stock. Plus, shares are nearing a potential trend line of support dating back to late 2008 (see weekly chart below).

FYI: The Point & Figure chart for GS is bearish with a $58 target.

Trigger @ 93.90

- Suggested Positions - (Small Positions)

buy the Jun $90 PUT (GS1216R90) current ask $1.60

- or -

buy the Jul $90 PUT (GS1221S90) current ask $4.05

Annotated Chart:

Weekly Chart:

Entry on May xx at $ xx.xx
Earnings Date 07/17/12 (unconfirmed)
Average Daily Volume = 5.5 million
Listed on May 30, 2012