10:20am (EST) This morning I talked about looking for setups on trades and profiled Abercrombie & Fitch (ANF, $26.40, up $0.60).  The first thing you want to do when planning a trade is look at a chart.  They aren’t that hard to figure out and that has been the purpose of expanding our service.  I told you support for Ambercrombie is at $25 and this morning, the stock hit a low of $25.17 BUT did not break below $25.  We got an immediate bounce and now it appears to be headed back to that upper channel of $27-$28.  I had already targeted two options that could be used to play a breakdown and ruled out any June option plays.  The bounce this morning has given us the opportunity for a great entry point but we need to be careful.  I believe a break below $25 in coming.  It is going to be a rough quarter when Ambercrombie reports, especially when business is dropping off at a 30% clip. Start a half position in the July 25 puts (ZWRSE, $1.15, down $0.20) at current levels.  The bid is $1.15, the ask is currently $1.25.  Use limit orders of $1.20 if you want to get in NOW, or you can use a limit order of $1.00 and wait for the stock to trade back above $27. Rick Rouse Rick@TheOptionInvestor.com]]>