NEW DIRECTIONAL PUT PLAYS

Bard (CR), Inc – BCR – close 85.42 change -1.57 stop 88.50

Company Description:
C. R. Bard, Inc. (Bard) is engaged in the design, manufacture, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. The Company sells a range of products worldwide to hospitals, individual healthcare professionals, extended care facilities and alternate site facilities. Bard has four product group categories: vascular, urology, oncology and surgical specialties. On November 18, 2009, the Company acquired Y-Med, Inc. (Y-Med), a company focused on the development and manufacture of specialty percutaneous transluminal angioplasty (PTA) catheters. On June 15, 2009, the Company acquired worldwide rights and related assets of the hernia products business of Brennen Medical, LLC.(source: company press release or website)

Why We Like It:
Healthcare related companies have been under pressure recently and I expect this to continue as details about the healthcare reform bill surface and uncertainty remains. BCR is forming a bearish wedge pattern on its daily chart and looks vulnerable. The stock bounced nicely off of its 50-day SMA today but that probably had more to do with the market rebounding more than anything else. BCR closed just below its 20-day SMA. The stock is also approaching a congestion zone from late 2007 through early 2009 that I believe will hold. BCR reported earnings in line with expectations today so I am not too worried about investors getting overly excited about the stock at these levels. I suggest traders initiate June $85.00 PUTS if BCR trades to $85.95. We'll place a stop above recent highs at $88.50. Our target is $83.05 and our time frame is several weeks.

Suggested Position: Trigger to Buy BCR JUNE $85 PUT, current ask 2.65, estimated ask at entry 2.40

Annotated Chart:

Entry on April xxth at $ xx.xx
Earnings Date July (unconfirmed)
Average Daily Volume = 1.5 million
Listed on April 22, 2010