NEW DIRECTIONAL PUT PLAYS

ITT Educational Services - ESI - close: 29.40 change: -2.36

Stop Loss: 32.05
Target(s): 25.15
Current Option Gain/Loss: + 0.0%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: Yes, see below

Company Description

Why We Like It:
Education stocks were underperformers on Wednesday. ESI broke down under what should have been support near $30.00. The stock is already short-term oversold so I do consider this a more aggressive trade. There is nothing to stop ESI from growing more oversold.

We want to open small bearish positions at the opening bell tomorrow with a stop loss at $32.05. Our target is $25.15.

I want to reiterate my caution about small positions. ESI already has a high amount of short interest because so many investors think this stock is going lower.

- Suggested *SMALL* Positions -

buy the 2013 Jan $27.50 PUT (ESI1319m27.5) current ask $3.10

Annotated Chart:

Entry on October xx at $ xx.xx
Average Daily Volume = 408 thousand
Listed on October 2, 2012


Juniper Networks - JNPR - close: 16.61 change: -0.12

Stop Loss: 17.75
Target(s): 14.10
Current Option Gain/Loss: Unopened
Time Frame: Exit prior the late October earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
JNPR continues to show relative weakness and closed at new two-month lows. The breakdown under $17.50 is bearish. JNPR looks like it's headed for the July lows.

I am suggesting small bearish positions at the opening bell tomorrow. Our target is $14.10 but we'll plan to exit prior to the late October earnings report (not yet confirmed). FYI: The Point & Figure chart for JNPR is bearish with a $13.50 target.

- Suggested *SMALL* Positions -

buy the Nov $16 PUT (JNPR1211W16) current ask $0.77

Annotated Chart:

Entry on October xx at $ xx.xx
Average Daily Volume = 6.6 million
Listed on October 2, 2012