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  PH

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Marriot - MAR - close: 63.37 chg: -2.52 stop: 66.11

Company Description:
MARRIOTT INTERNATIONAL, INC. is a leading lodging company with more than 2,600 lodging properties in the United States and 65 other countries and territories. Marriott International operates and franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton, Renaissance, Bulgari, Residence Inn, Courtyard, TownePlace Suites, Fairfield Inn and SpringHill Suites brand names; develops and operates vacation ownership resorts under the Marriott Vacation Club International, Horizons, The Ritz-Carlton Club and Marriott Grand Residence Club brands; operates Marriott Executive Apartments; provides furnished corporate housing through its Marriott ExecuStay division; and operates conference centers. The company is headquartered in Washington, D.C., and has approximately 133,000 employees. (source: company press release)

Why We Like It:
We like MAR as a bearish candidate because the bullish up trend has been broken. Shares of MAR were very strong for months but the stock peaked a couple of weeks ago ahead of its April earnings report. When the market tanked mid April shares of MAR broke down under its trendline of support and its simple 50-dma and its 100-dma. The market's recent oversold bounce helped lift MAR just high enough to retest the $66.00 level (and its 40 and 50-dma's) as new resistance. Now MAR is turning lower on big volume nearly double the norm. Short-term technical oscillators are turning bearish. This looks like an opportunity to capture a quick decline toward the $60.00-58.00 range. The $60.00 level is likely to be round-number support while the $58 level should be supported by its simple 200-dma.

Suggested Options:
We are suggesting the June puts although Julys will certainly work.

BUY PUT JUN 65.00 MAR-RM OI= 150 current ask $2.95
BUY PUT JUN 60.00 MAR-RL OI= 512 current ask $0.09

Picked on April 28 at $ 63.37
Change since picked: - 0.00
Earnings Date 04/21/05 (confirmed)
Average Daily Volume = 1.2 million

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Parker Hannifin - PH - close: 59.08 change: -0.99 stop: 62.01

Company Description:
With annual sales approaching $8 billion, Parker Hannifin is the world's leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of commercial, mobile, industrial and aerospace markets. The company employs more than 48,000 people in 46 countries around the world. (source: company press release)

Why We Like It:
It looks like shares of PH have been in trouble ever since the stock lost its upward momentum back in December 2004. There was a sharp drop in mid January as investors reacted to the company's earnings report where PH missed earnings estimates. The stock managed to rebound somewhat through February-March only to find resistance near $70.00. In late March PH crashed again after issuing an earnings warning. Ever since shares of PH have been pinned under resistance near $62.00. Now with the major market averages on the verge of breaking down yet again we suspect this could be an attractive entry point for put positions in PH. Technical traders will note that PH's MACD is nearing a new sell signal and its RSI and stochastics are turning bearish again too. Plus, the stock's P&F chart is in a sell signal with a $44 target. Our target is the $55.00-54.00 region. More conservative traders may want to wait for a little confirmation and only initiate new plays on a decline below the $58.00 level.

Suggested Options:
We are suggesting the June puts although the May and August strikes do have more open interest.

BUY PUT JUN 60.00 PH-RL OI= 52 current ask $2.85
BUY PUT JUN 55.00 PH-RK OI= 63 current ask $0.90

Picked on April 28 at $ 59.08
Change since picked: - 0.00
Earnings Date 04/18/05 (confirmed)
Average Daily Volume = 1.2 million
 

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