NEW DIRECTIONAL PUT PLAYS

Netflix, Inc. - NFLX - close: 64.64 change: -1.24

Stop Loss: 67.25
Target(s): 60.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The days of NFLX and its red envelope are over, or at least fading. The company is trying to dominate the online, Internet-access entertainment subscription industry. Unfortunately it's an industry with growing competition. Shares of NFLX remain in a bearish trend.

The recent oversold bounce from the $60 area is fading and NFLX looks poised to resume its trek lower. I am suggesting small bearish put positions at the open tomorrow. We do want to limit our position size because NFLX can be volatile at times and being short the stock is a popular position with short interest at 20% of the 54 million share float.

We'll use a stop loss at $67.25, just above today's high. Our first target is $60.25. More aggressive traders could aim a lot lower. The Point & Figure chart is suggesting a $48 target although I suspect the $50 level could be significant support.

(Small positions) - Suggested Positions -

buy the Jul $60 PUT (NFLX1221S60) current ask $3.60

Annotated Chart:

Entry on June xx at $ xx.xx
Earnings Date 07/23/12 (unconfirmed)
Average Daily Volume = 4.9 million
Listed on June 07, 2012


Oil States Intl. - OIS - close: 66.75 change: +1.72

Stop Loss: 68.55
Target(s): 61.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The oil services sector tends to be a rowdy bunch. Shares of OIS are definitely showing some volatility over the last several days. Yet the oversold bounce, as sharp as it is, has stalled at resistance. The larger trend remains bearish so this rally today looks like a bearish entry point.

I am suggesting bearish positions tomorrow at the open with a stop loss at $68.55, just above today's high. Our target is $61.50.

- Suggested Positions -

buy the Jul $60 PUT (OIS1221S60) current ask $1.70

Annotated Chart:

Entry on June xx at $ xx.xx
Earnings Date 07/30/12 (unconfirmed)
Average Daily Volume = 720 thousand
Listed on June 07, 2012