Play ANF Puts Now

Establish Downside Bias in Retail

By Bryan Bottarelli
Monday, May 19, 2008 3:05 PM EDT
Mon, 19 May 2008 19:05:00 GMT

PLAY: Buy the ANF June 75 Puts (ANF RO) at or under $2.75, good for the day.

Dear Bottarelli Research Member,

The Abercrombie & Fitch (ANF – NYSE) chart is in a very dangerous spot. As you can see, the trendy teen retailer is currently stuck between the 200-day and the 50-day moving average — and today’s action suggests that the 200-day average is a strong level of resistance. Combine this resistance level with a series of lower-highs (as noted by declining tops in March, April, and now in May) and it looks like ANF shares are headed back down to $70.00.

ANF

It makes sense that an expensive (and fickle) retailer is having trouble growing sales in a recessionary environment, so let’s establish a new downside position in ANF now. Here’s the play:

PLAY: Buy the ANF June 75 Puts (ANF RO) at or under $2.75, good for the day. Place a protective stop limit at $1.85 and a pre-determined sniper sell at $3.40.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From May 2008