Editor's Note:

In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Some of these stocks may need to see a break past key support or resistance:

(bullish ideas) QIHU, WDAY, SAFM, SPLK


Darden Restaurant - DRI - close: 48.38 change: -0.83

Stop Loss: 49.35
Target(s): 44.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Some of the restaurant stocks are underperforming the rest of the market. Less than stellar consumer spending and the rising price of gasoline at the pump could be cutting into restaurant sales. Recent earnings misses and disappointments from the likes of McDonald's (MCD) and Panera Bread (PNRA) do not inspire any investor confidence.

DRI operates several different restaurant chains including brands like Red Lobster and Olive Garden. The company is now up to about 2,100 restaurants. Unfortunately for investors the stock looks weak and appears to have formed a bearish head-and-shoulders pattern.

The stock looks like it's breaking down below support near $48.50 although you could argue that the $48.00 level is also support. I am suggesting a trigger to buy puts at $47.75. We do want to keep our position size small. Bulls could argue that DRI is already short-term oversold and due for a bounce. If we are triggered at $47.75 our target is $44.50.

Trigger @ 47.75 *small positions*

- Suggested Positions -

Buy the Aug $50 PUT (DRI1317T50) current ask $1.95

Annotated Chart:

Entry on July -- at $---.--
Average Daily Volume = 1.3 million
Listed on July 24, 2013