Focus Media Attacks Daily Low

Shares of Focus Media FMCN are plunging lower intra-day; currently, shares are off 4.14%, trading at $20.61. The stock is hovering just barely above the intra-day low of $20.53. This action is notable given the fact that shares have been rallying off of a sharp sell off from the past few weeks. With FMCN trading at the 20-day and 50-day moving averages, it was make or break time for the name. It appears that it is going to be break. This pattern has the potential to push shares all the way down to the $15.00 level in a very short period of time (especially if any other negative PR on China stocks emerges soon). First support comes in to play at $17.08, then $15.43, and finally $15.00. While the 8.77% short interest is notable, it is likely that any covering is over; in fact, I would be surprised to see short begin to lay out more shares in the very near future. Options traders can play Focus Media's demise by buying the January 2012 $20/17.50 put spread for a net debit of $0.95. Max gain on the trade is +$1.55, or +163%. Max loss is limited to the premium paid: $0.95. Focus Media Holding Limited operates an interactive digital media network. The company offers interactive digital media platforms aimed at Chinese consumers.