Who hasn’t looked at a stock chart and said to themselves that this stock can’t go any higher or can’t go any lower? Yet other traders can imagine the stock continuing to move in its current direction. Here’s a trade idea that counts on the stock moving lower to profit and is based on technical and fundamental analysis.

FLIR Systems ($21.39): Long Puts

The trade: Buy FLIR Systems‘ (NASDAQ:FLIR) July 22 puts for $1.60 or less.

The strategy: The long put is a strategy that can be used for a bearish outlook on a stock. The trade can profit if the stock falls, and the put premium increases as the option moves further and further in-the-money (ITM). Maximum profit is almost unlimited because the stock can fall only to $0 (which is highly unlikely), and the maximum loss is $1.60 if FLIR finishes at or above $22 at July expiration. Breakeven is $20.40 at expiration.

The rationale: FLIR designs and manufactures thermal imaging systems worldwide. The company has a price-earnings ratio below the industry average and below the S&P 500 average. Its earnings per share are lower now than in the same quarter a year earlier.

Technically, FLIR has been in a downtrend since the beginning of March, and don’t think the stock can’t go lower. FLIR is still considered expensive compared to other companies in its industry. Currently, the stock is at a minor support area around $21.30. If it can break support, it might have a good chance to head lower to a five-year support area around $19. The last pivot high ($21.85) should be monitored if the stock rallies higher.