Additional Trading Ideas:
In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Many of these need to see a break past key support or resistance:
APKT, GNRC, HITK, DWRE, ACOR, RP, ARNA
NEW BEARISH Plays
K12, Inc. - LRN - close: 19.37 change: -0.98
Stop Loss: 20.60
Current Gain/Loss: unopened
Entry on January xx at $ xx.xx
Listed on January 14, 2012
Time Frame: Exit prior to earnings on Feb. 5th
Average Daily Volume = 221 thousand
New Positions: Yes, see below
Why We Like It:
LRN is in the education industry. The stock seems to be in a long-term tailspin lower. On the weekly chart below you can see the trend of lower highs and lower lows. LRN has just rolled over again. However, I want to point out that there are a lot of investors already bearish on the stock. The most recent data listed short interest at 53% of the very small 26 million share float. That raises the risk of a short squeeze.
Therefore, instead of launching short positions on the stock I am suggesting we buy put options to capture the stock's decline. That way we can limit our risk to the value of the put option we purchase.
I am suggesting a trigger to buy puts at $18.90. If triggered our target is $16.25.
Trigger @ 18.90
buy the Feb $20 PUT (LRN1316n20) current ask $1.80