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Black & Decker - BDK - close: 83.31 chg: -2.35 stop: 87.75

Company Description:
Black & Decker is a leading global manufacturer and marketer of power tools and accessories, hardware and home improvement products, and technology- based fastening systems. (source: company press release or website)

Why We Like It:
It has been downhill for BDK ever since the company reported better than expected earnings on July 26th. The recent oversold bounce, powered by the market's early September rally, has failed under the simple 50-dma. Now shares of BDK are breaking multiple levels of support including the $84.00 level, its simple 200-dma and its exponential 200-dma. Today's 2.74% sell-off was powered by strong volume about twice the norm. The Point & Figure chart points to a $74.00 target. We see today's decline as an entry point to catch a ride toward the $78-77 range. Expect a bounce at the $80.00 level but we suspect it will only be a speed bump on the way down.

Suggested Options:
We are suggesting the November puts but plan to exit ahead of BDK's late October earnings report.

BUY PUT NOV 85.00 BDK-WQ OI=699 current ask $4.50
BUY PUT NOV 80.00 BDK-WP OI=545 current ask $2.00

Picked on September 14 at $ 83.31
Change since picked: - 0.00
Earnings Date 10/25/05 (unconfirmed)
Average Daily Volume = 636 thousand
 

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