Add ISRG Puts

Possible $10 Down-Move Looming

By Bryan Bottarelli
Thursday, May 10, 2007 12:16 PM EDT
Thu, 10 May 2007 16:16:00 GMT

Dear Bottarelli Research Member,

Within the last hour, the markets have turned decisively lower — which is helping out our MON June 60 Puts (MON RL) and our SPY June 150 Puts (SYH RT). In the past, any intra-day downside weakness has been quickly bought up — which is why I entered the two speculative calls today on FSLR and FMCN. At the same time, I’d also like to maintain our TIE calls for any forthcoming takeover speculation. But now I’m getting a bearish signal on Intuitive Surgical (ISRG – NASDAQ) and I’d like to add these puts to our ledger as well.

ISRG

ISRG is the maker of the remarkable da Vinci surgical system — which allows doctors to perform operations from remote locations. The technology is quite amazing, but as you can see by the chart, ISRG looks ready for a breather. They’ve attempted to surpass the $135 level without success since mid-April, which signals to me that this is the near-term ceiling. Let’s add ISRG puts to capitalize on any downside weakness. From the looks of things, the stock could peel off $10.00 in short order and fill the gap around the $124 level. Here’s the play:

PLAY: Buy the ISRG June 130 Puts (AXQ RV) at or under $4.60, good for the day. Current bid/ask spread is $4.40 to $4.60. Place a protective stop limit at $2.50.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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