NEW DIRECTIONAL PUT PLAYS

Salesforce.com - CRM - close: 126.72 change: -4.28

Stop Loss: 130.25
Target(s): 111.00
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the mid August earnings
New Positions: Yes, see below

Company Description

Why We Like It:
The recent oversold bounce in CRM has completely reversed. Once again this high-dollar tech stock is testing key support near $125.00. The three-month trend of lower highs would suggest CRM is going to break down! The P&F chart is also forecasting a breakdown with a $108 target.

I am suggesting a trigger to buy puts at $124.00. If triggered we will target a drop to $111.00. This is an aggressive, higher-risk trade because CRM can be a volatile stock.

Trigger @ 124.00

- Suggested Positions -

buy the Aug $120 PUT (CRM1218T120) current ask $3.60

Annotated Chart:

Entry on July xx at $ xx.xx
Earnings Date 08/16/12 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on July 24, 2012


Rackspace Hosting - RAX - close: 41.22 change: -1.76

Stop Loss: 41.55
Target(s): 35.50
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the Aug 7th earnings
New Positions: Yes, see below

Company Description

Why We Like It:
RAX is a cloud-computing and IT systems company. The stock's recent attempts to rally have been sold. Shares look poised to break down from its current five-week trading range. There is support near the $41.00-41.25 area.

Aggressive traders could buy puts on a breakdown under $41.00. I am suggesting a trigger to buy puts at $39.90 instead. If triggered our target is $35.50.

Trigger @ 39.90

- Suggested Positions -

buy the AUG $40 PUT (RAX1218T40) current ask $2.15

Annotated Chart:

Entry on July xx at $ xx.xx
Earnings Date 08/07/12 (confirmed)
Average Daily Volume = 1.6 million
Listed on July 24, 2012