NEW DIRECTIONAL PUT PLAYS
Russell 2000 iShares - IWM - close: 56.22 change: -0.11 stop: 62.55
Why We Like It:
The Russell has formed a bearish double top. Yet on a short-term basis the $RUT and the IWM (ETF on the Russell 2000) are short-term oversold and look ready to bounce from support. Nimble traders could try playing the bounce from $55 toward $60.00. I'm not suggesting bullish trades. Our plan here is to use a bounce toward $60 as a new entry point to buy puts.
Our trigger to buy puts is $59.00. If triggered our first target is $55.50. Our second target is $52.00 (or the 200-dma).
I am suggesting the December puts. My time frame is several weeks. I prefer the $60 December put.
BUY PUT DEC 60.00 DIW-XH open interest=22582 current ask $4.85
Picked on November xx at $ xx.xx <-- TRIGGER @ 59.00
Change since picked: + 0.00
Earnings Date --/--/--
Average Daily Volume = 54.5 million
Listed on November 02, 2009