NEW DIRECTIONAL PUT PLAYS

eBay Inc. - EBAY - close: 50.43 change: -0.18

Stop Loss: 51.75
Target(s): 46.00
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to September option expiration
New Positions: Yes, see below

Company Description

Why We Like It:
We are bringing EBAY back for another shot at a bearish trade. The last time we tried our EBAY trade did not open. Yet it looks like the stock's bounce from technical support at its simple 300-dma is failing. Shares closed below this long-term moving average for the second day in a row. EBAY is now approaching major support near $50.00. A breakdown here could be very significant (see the weekly chart below).

We are suggesting a trigger to buy puts at $49.75. If triggered our target is $46.00. More aggressive traders may want to aim lower.

NOTE: We are listing the September puts, which expire in less than four weeks. You might want to play the Octobers instead.

Trigger @ 49.75

- Suggested Positions -

Buy the Sep $50 PUT (EBAY1321u50) current ask $1.04

Annotated Chart:

Weekly Chart:

Entry on August -- at $---.--
Average Daily Volume = 8.2 million
Listed on August 28, 2013