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DHR

New Calls

Danaher - DHR - close: 56.67 chg: -0.01 stop: 53.99

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:
We are going to breakdown and add a bullish candidate to the list. We strongly hesitate to do so since the major averages continue to look overbought, extended and due for a pull back. Fortunately, DHR has shown lots of relative strength since its earnings report on July 21st. The breakout through a cloud of technical resistance with all of its moving averages has been followed with a breakout over price resistance in the $56.00 region. Plus, DHR's rally has reversed its P&F chart into a new buy signal that now points to a $68 target. We also notice that the action over the past eight months looks like an inverse or bullish head & shoulders pattern (see chart). We are going to suggest bullish positions here but traders may want to take a patient approach to initiating positions. There is a good chance that DHR could dip back toward its 10-dma near $55.60 or even $55.00 before continuing higher. We're going to target the $60.00-62.0 range.

Suggested Options:
We are suggesting the September calls.

BUY CALL SEP 55.00 DHR-IK OI=2639 current ask $2.65
BUY CALL SEP 60.00 DHR-IL OI= 999 current ask $0.45

Picked on August 03 at $ 56.67
Change since picked: + 0.00
Earnings Date 07/21/05 (confirmed)
Average Daily Volume = 1.5 million
 

New Puts

CR Bard - BCR - close: 64.45 chg: -1.46 stop: 67.51

Company Description:
C. R. Bard, Inc., headquartered in Murray Hill, N.J., is a leading multinational developer, manufacturer and marketer of innovative, life-enhancing medical technologies in the fields of vascular, urology, oncology and surgical specialty products. (source: company press release or website)

Why We Like It:
The 2 1/2 year rally in shares of BCR appeared to have peaked near $75.00 in May. Since then the stock has been sliding under a trend of lower highs although BCR did spend most of the last six weeks in a trading range between $65.00 and $68.00. BCR recent action has been very bearish. The stock failed at its simple 50-dma, broke down under both its simple and exponential 200-dma's, and broke through round-number price support at the $65.00 level on above average volume. This has naturally turned its technical indicators bearish but we also see that its P&F chart has turned bearish and points to a $59 target. We are going to suggest bearish positions here under $65.00 and target a drop into the $60.50-60.00 range.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 65.00 BCR-VM OI= 90 current ask $3.90
BUY PUT SEP 60.00 BCR-VL OI=220 current ask $2.50

Picked on August 03 at $ 64.45
Change since picked: + 0.00
Earnings Date 07/19/05 (confirmed)
Average Daily Volume = 553 thousand

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F5 Networks - FFIV - close: 38.76 chg: -2.24 stop: 42.51

Company Description:
F5 enables organizations to successfully deliver business-critical applications and gives them the greatest level of agility to stay ahead of growing business demands. As the pioneer and global leader in Application Traffic Management, F5 continues to lead the industry by driving more intelligence into the network to deliver advanced application agility. F5 products ensure the secure and optimized delivery of applications to any user -- anywhere. Through its flexible and cohesive architecture, F5 delivers unmatched value by dramatically improving the way organizations serve their employees, customers and constituents, while lowering operational costs. The company is headquartered in Seattle, Washington with offices worldwide. (source: company press release or website)

Why We Like It:
The reaction to FFIV's earnings report on July 20th has been pretty negative. Shares gapped lower and then plummeted toward round-number support at the $40.00 level. The last couple of weeks has seen an oversold bounce in the stock but this bounce failed near $43.35 and under its declining 10-dma. Now shares have broken down through psychological support at the $40.00 mark on volume well above the average. The whole move down from its mid-July peak has produced a sharp sell signal in its P&F chart, which now points to a $26 target. We see today's decline under $40.00 as a new bearish entry point. However, more patient traders may want to consider waiting for a rebound back toward the $40.00 level, which should now act as resistance. A failed rally under $40.00 could be a great entry point to buy puts. We're going to target the $35.00-34.00 range. The biggest risk we see to this play, other than the NASDAQ continuing to climb higher in non-stop fashion, is larger rival CSCO's earnings results due out on August 9th. A positive reaction to CSCO's earnings could influence shares of FFIV.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 40.00 FLK-UH OI=524 current ask $3.00
BUY PUT SEP 35.00 FLK-UG OI=497 current ask $0.90

Picked on August 03 at $ 38.76
Change since picked: + 0.00
Earnings Date 07/20/05 (confirmed)
Average Daily Volume = 1.4 million
 

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