NEW DIRECTIONAL PUT PLAYS

DaVita HealthCare - DVA - close: 110.85 change: +0.49

Stop Loss: 112.15
Target(s): 105.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
DVA is in the specialized health services industry with its kidney dialysis service. After an 18-month rally from its 2011 lows this stock finally peaked this year with a bearish double top in May and June. Since the peak DVA has been correcting lower and chewing through support levels.

DVA just bounced after flirting with a drop below the $110 level. Yet the bounce failed today near $112.00 and its 10-dma and 300-dma. We are suggesting traders buy put options now and use a stop just above today's high. Our short-term target is $105.25. More aggressive traders could aim lower since the Point & Figure chart for DVA is bearish with a $96 target.

FYI: Investors should note that DVA does have a 2-for-1 split coming up on September 9th.

- Suggested Positions -

Buy the Sep $110 PUT (DVA1321u110) current ask $1.85

Annotated Chart:

Entry on August -- at $---.--
Average Daily Volume = 833 thousand
Listed on August 26, 2013