Add KSS Puts

Playing An Earnings Trigger

By Bryan Bottarelli
Tuesday, November 11, 2008 11:23 AM EST
Tue, 11 Nov 2008 16:23:00 GMT

PLAY: Buy the KSS December 30 Puts (KSS XF) at or under $3.60, good for the day. Place a protective stop limit at $2.10 and set a pre-determined sniper sell at $5.50.

Dear Bottarelli Research Member,

I’m afraid that things are getting ugly once again. As you can see from the Dow chart below, it’s pretty clear to me that the Blue Chips are on their way to 8,000. Perhaps even lower. That means we can expect 600 more points of downside here in the near-term.

INDU

What’s worse, the retail sector looks absolutely nauseating. As I’ve mentioned in my weekly LEAPS alerts, this upcoming holiday shopping season looks to be the worst in the last 25 years. Therefore, it’s smart to get positioned to ride this down-trend using puts on mid-level retailer Kohl’s (KSS – NYSE).

KSS

As you can see, the stock put in a nice rally over the last two weeks, but now that rally is failing miserably. To my eye, KSS is on the fast track to levels down below $25.00, especially leading up to their earnings announcement on November 13th. As I study this situation, I can’t imagine KSS reporting anything remotely close to positive in this market environment, so let’s get positioned in December puts now!

PLAY: Buy the KSS December 30 Puts (KSS XF) at or under $3.60, good for the day. Place a protective stop limit at $2.10 and set a pre-determined sniper sell at $5.50.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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