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New Long Plays

None today.

New Short Plays

Danaher - DHR - close: 55.79 change: -1.58 stop: 57.35

Company Description:
Danaher Corporation is a leading manufacturer of Professional Instrumentation, Industrial Technologies and Tools and Components. (source: company press release or website)

Why We Like It:
Ouch! This past Thursday night DHR reaffirmed its 2005 guidance and gave a positive 2006 forecast. Yet investors reacted by selling the stock with big volume more than twice the daily average. The Friday sell-off (-2.7%) broke down below its narrow rising channel and support at the $56 level. The move also produced a new MACD sell signal did some damage to the weekly technicals as well. Given the big volume numbers over the past two days we don't think the selling is done yet. We are suggesting shorts here with DHR under $56. However, there is a good possibility there will be an oversold bounce next week. The $57 level should act as resistance and a failed rally under $57 could be used as a new bearish entry point. Traders should weigh their need to be in the market (and short) against the possibility of a Santa Claus rally showing up. Our target for DHR is the $51.25-51.00 range.

Picked on December 18 at $55.79
Change since picked: + 0.00
Earnings Date 02/16/05 (unconfirmed)
Average Daily Volume: 1.5 million


Waters Corp. - WAT - close: 38.60 chg: -0.37 stop: 40.01

Company Description:
Waters Corporation holds worldwide leading positions in three complementary analytical technologies: liquid chromatography, mass spectrometry, and thermal analysis. These market segments account for $4.5 - $5.0 billion of the overall $20+ billion analytical instrumentation market. (source: company press release or website)

Why We Like It:
WAT is actually lumped in the same sector as DHR - scientific and technical instruments. Yet WAT is showing a much more bearish pattern on its daily chart. The stock gapped down on December 5th after being downgraded. Since then shares have rebounded by the bounce is failing (again) under its four-month resistance trendline of lower highs (see chart). Wednesday's failed rally at the $40.00 level was the last test of this resistance. The P&F chart for WAT points to a $25.00 target. We think the stock could sink to the $35.00 level by its earnings report in January. We'll use a $35.25-35.00 target range.

Picked on December 18 at $38.60
Change since picked: + 0.00
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume: 901 thousand

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