NEW DIRECTIONAL PUT PLAYS
Deckers Outdoor - DECK - close: 35.48 change: -0.38
Stop Loss: 36.55
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the late October earnings report
New Positions: Yes, see below
Why We Like It:
DECK is a shoe maker. The stock is trading near multi-year lows. Shares appear to be breaking down from a bear-flag consolidation pattern. More aggressive traders may want to launch bearish positions right now.
I want to caution readers that there are already a lot of bearish traders in DECK. The most recent data listed short interest at 33% of the small 30 million share float. That raises the risk of a short squeeze. Therefore we want to limit our position size to reduce our risk.
I am suggesting a trigger to buy puts at $34.45. Our target is $30.25.
FYI: The Point & Figure chart for DECK is bearish with a long-term $20 target.
Trigger @ 34.45
- Suggested Positions -
buy the NOV $35 PUT (DECK1211w35) current ask $3.10
Entry on October xx at $ xx.xx
Average Daily Volume = 2.5 million
Listed on October 9, 2012