Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trading ideas:

HITK - shares have been able to maintain their bullish trend. A rally past $39.50 or $40.00 could be a bullish entry point.

CMI - a drop under the November low might be a bearish entry point. My concern is that CMI is already short-term oversold.

FOSL - shares are testing support near $80.00. A breakdown under $79.50 could be used as a bearish entry point.

CYMI - this stock is consolidating sideways above support near $46 and its 200-dma. A rally past $48.50 might be a bullish entry point.

- James


AGCO Corp. - AGCO - close: 40.67 change: -0.75

Stop Loss: 42.75
Target(s): 35.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
AGCO is in the farm and agricultural equipment making business. Unfortunately for shareholders the stock has been struggling with a bearish trend of lower highs since its peak back in April this year. The past couple of months the simple 200-dma has been a lid on the stock price. Now shares are breaking down past their 50 and 100-dma.

More aggressive traders may want to open bearish positions now. I want to see AGCO trade under what could be round-number support at $40.00. I am listing a trigger to buy puts at $39.90. You could argue that AGCO is already short-term oversold so we'll try and limit our risk by keeping position size small. We'll start with a stop loss at $42.75, just above Wednesday's high. Our target is $35.25.

Trigger @ 39.90

- Suggested Positions -

buy the Jan $40 PUT (AGCO1221M40) ask $2.20

Annotated Chart:

Entry on December xx at $ xx.xx
Earnings Date 02/07/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on December 15, 2011