NEW DIRECTIONAL PUT PLAYS
Limited Brands Inc - LTD - close 24.14 change -0.82 stop 25.65
Limited Brands, Inc. is a specialty retailer of womens intimate and other apparel, beauty and personal care products and accessories under various trade names. The Company sells its merchandise primarily through its retail stores in the United States and Canada and through its Websites and catalogues. The Company operates in two segments: Victoria's Secret and Bath & Body Works. It sells its products at more than 1,000 Victoria's Secret stores and more than 1,600 Bath & Body Works stores nationwide, via the Victoria's Secret Catalogue and online at www.VictoriasSecret.com and www.BathandBodyWorks.com. It also sells upscale accessory products through its Henri Bendel flagship and 10 accessory stores, as well as online at www.HenriBendel.com.
Target(s): 23.30, 22.70, 22.05
Key Support/Resistance Areas: 25.40, 23.85, 22.60, 22.00
Time Frame: Several weeks
We are sticking with a consumer name in the retail space. Retailers are weak and LTD looks ready for a drop if the broader market cooperates. Technically LTD looks like it wants to retest its recent swing lows. There was also a big buyer of the September $25 puts with over 2,200 contracts purchased and I like the volume flow. I suggest we initiate short positions now or on any strength in the stock. $24.50 is just below the 50-day SMA which can be used to time an entry. Our stop is $25.65. Our first target of $23.30 which is about -5% lower from current levels. NOTE: The October strikes were just recently released for trading so the open interest isn't as high as surrounding months.
Suggested Position: Buy October $24.00 PUT, current ask $1.40
Entry on August xx
Earnings: 11/17/10 (unconfirmed)
Average Daily Volume: 4.4 million
Listed on August 30, 2010