NEW DIRECTIONAL PUT PLAYS

Rockwell Collins Inc. - COL - close: 49.27 change: -1.10

Stop Loss: 50.55
Target(s): 45.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of COL had been bouncing along support at the $50.00 level these past two weeks. Yet the market's sprint lower on Friday finally pushed COL past this key support level. This move could signal the beginning of a new leg lower. The next level of support appears to be the $45-44 area.

I am suggesting new bearish positions at the open on Monday with a target of $45.50. We'll use a stop loss at $50.55.

- Suggested Positions -

buy the Jul $50 PUT (COL1221S50) current ask $2.30

Annotated Chart:

Entry on June xx at $ xx.xx
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on June 02, 2012


E.I. du Pont de Nemours - DD - close: 47.21 change: -1.05

Stop Loss: 48.51
Target(s): 44.25
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
DD's big 3.6% dividend yield does not appear to be helping the stock avoid declines. The stock spent almost two weeks holding support near $48 and its 200-dma but Friday's market drop was too much. DD has broken down to new relative lows. This could signal a new leg lower.

There appears to be some support in the $44-43 zone. We will aim for $44.25.

- Suggested Positions -

buy the Jul $45 PUT (DD1221S45) current ask $1.27

Annotated Chart:

Entry on June xx at $ xx.xx
Earnings Date 07/24/12 (unconfirmed)
Average Daily Volume = 5.0 million
Listed on June 02, 2012