Garmin Ltd. (GRMN)
Update (10/24/07)

As I noted in our earlier report on GRMN, we thought the greater likelihood was for one more rally, and then a reversal, at which point we'd consider going short.  The stock today reached an intraday peak of 125.68, which was right in line with our projected top at the 124-126 area.  The stock sold off sharply following this, and deeply enough that the potential second target at 133 is less likely.   Consequently, we're reversing course, with the stock having achieved the most probable highs today.

I've outlined the various levels of Fibonacci support, and if a top is in, then the two key support levels are those proximate to previous fourth waves of lesser degree.  In this case, these are at 109, where the selling could pause for a recovery bounce, and next at 95.  If the latter is achieved, this would erase the entire advance from Oct. 3rd, which (as it turns out) was a Fibonacci 21 days ago.  There is resistance at 121.37, 122.35, and 123.98 on the bounce back from today's selling, so you may want to await a full break of 117, which should confirm the next leg down in the correction is in effect.

For a Put play, the January 2008 $105 Put (symbol RZJMA) is currently pricing in at $7.00.   As with the Call, the Delta for the Put is a bit on the low side at 0.33, through there is volatility in the pricing now with the current pullback, and it should appreciate well as it moves more ATM. 

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