NEW DIRECTIONAL PUT PLAYS

Lockheed Martin Corp. - LMT - close: 88.11 change: -2.07

Stop Loss: 90.65
Target(s): 84.25
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The stock market's widespread sell-off today has produced a bearish breakdown in shares of LMT. The stock had been consolidating sideways between technical support and resistance but today's drop is a new breakdown.

I am suggesting small bearish positions at the open tomorrow morning. We do want to keep our position size small because LMT has produced a new breakdown on its daily chart but it has not yet broken below potential support on the weekly chart. It is possible the stock could bounce off the trend line displayed on the weekly chart below but I doubt it given the market's broader weakness.

- Suggested *Small* Positions -

buy the Dec $85 PUT (LMT1222x85) current ask $1.65

Annotated Chart:

Weekly Chart:

Entry on November xx at $ xx.xx
Average Daily Volume = 1.6 million
Listed on November 14, 2012


Whole Foods Market - WFM - close: 88.09 change: -2.32

Stop Loss: 91.05
Target(s): 82.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
WFM dropped sharply on Nov. 8th following its earnings report. Shares tried to hold support near $90 and its 200-dma. Yet the oversold bounce has failed. WFM is breaking down to new multi-month lows and is poised to break through a major trend line on its weekly chart (see below).

We want to open small bearish positions at the open tomorrow. I am suggesting small positions because it is possible that WFM could bounce on its long-term trend line but given the market's widespread weakness I am expecting new lows.

- Suggested *small* Positions -

buy the DEC $87.50 PUT (WFM1222x87.5) current ask $2.63

Annotated Chart:

Weekly Chart:

Entry on November xx at $ xx.xx
Average Daily Volume = 1.6 million
Listed on November 14, 2012