Is Revlon (Symbol: REV) now a trade? In my June 14, 2007 article, “Revlon Remains Flat,” I told you that Revlon would stumble by 10-20% over the summer. It’s happened.

Revlon was $1.36 when I wrote that article and today it closed at $1.04—about 25.5% down. It’s dropped about 10 cents per share over the past couple of trading days.

While the company isn’t worth going long in, it might be worth trading. I think this trade is especially appealing for those with limited capital.

For instance, a bump back to typical levels will mean a 6-8 cent per share rise—or 5-8% increase from it’s current price. And more after it falls, which I believe it will.

Revlon reports earnings on August 08, 2007. The consensus is that Revlon will report a net loss of $0.07 per share, but I think they’ll miss that number. I’m looking for something closer to a net loss of $0.11 per share.

And when that happens, I’m expecting a further drop in the stock and the opening of a nice opportunity to buy and hold very short-term for a quick bump. At some point during one of the upcoming days Revlon will fall below $1 per share and I won’t be surprised to see it at $0.80 - $0.90.

Today, volume spiked past the average—2,304,900 shares traded. Activity is heating up and it’s signaling more sell offs.

For those who love their history, this stock did fall below $1 per share last year and it rebounded.

Just a warning, this is a speculation play. I would not own it before earnings come out. I think the earnings report could be a catalyst to getting this stock where we want it—$0.95 or lower.

There are many ways to play the stock. I’d love to hear your ideas for playing with Revlon.