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None ITW

New Calls

None today.
 

New Puts

Illinois Tool Works - ITW - cls: 85.05 chg: -0.59 stop: 87.35

Company Description:
ITW is an $11.7 billion in revenues diversified manufacturer of highly engineered components and industrial systems. The company consists of approximately 650 decentralized operations in 45 countries and employs some 49,000 people. (source: company press release or website)

Why We Like It:
The combination of weakness in the major averages and ITW rolling over under resistance at the top of its descending channel sounds like an attractive entry point to buy puts. The stock bounced along the bottom of its descending channel through May and June and finally managed a rebound toward the top of the channel in July. That rebound stalled in the $85.50-87.00 region near the top of its channel for the last four weeks. Now ITW is beginning to turn lower and technicals confirm the reversal although its P&F chart does not. We are suggesting readers consider bearish positions here under the $86 level and target the $80.25-80.00 range. More aggressive traders may want to target the bottom of the channel somewhere in the $78-77 region.

Suggested Options:
We are suggesting the October puts.

BUY PUT OCT 90.00 ITW-VR OI= 25 current ask $5.60
BUY PUT OCT 85.00 ITW-VQ OI= 0 current ask $2.35
BUY PUT OCT 80.00 ITW-VP OI=125 current ask $0.80

Picked on August 23 at $ 85.05
Change since picked: + 0.00
Earnings Date 07/21/05 (confirmed)
Average Daily Volume = 1.2 million
 

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