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We have been bullish on Adobe (NASDAQ:ADBE), on the basis of its current product cycle. In the past, the stock has rallied strongly ahead of major product releases, and this cycle has been no different. Now, Adobe has launched one of its major products.

Adobe Announces Availability of Acrobat 8 Software to Rave Reviews from Customers -

Acrobat 8 Professional for Microsoft® Windows® and Mac OS X, and Acrobat 8 Standard for Windows, are immediately available in English, French, German, and Japanese language versions. The Mac OS X version of Acrobat 8 Professional is a Universal Binary that will install on Intel® and PowerPC® based Macintosh systems. Acrobat 8 Professional is available for an estimated street price of US$449, and registered users of qualifying earlier versions of Acrobat1 can upgrade to Acrobat 8 Professional for an estimated street price of US$159. Acrobat 8 Standard is available for an estimated street price of US$299, and registered users of qualifying earlier versions of Acrobat2 can upgrade to Acrobat 8 Standard for an estimated street price of US$99. Additionally, Adobe Reader 8 is expected to be available in early December 2006.

Since we have been calling things pretty well on this so far, we will say that the rally may soon (at least temporarily) come to an end. Next Spring, the company is expected to launch the new versions of its Creative Suite, which includes such popular programs as PhotoShop and InDesign and will now include the Flash product line from its Macromedia acquisition. Once those products are launched it will be a while before they have a hot new update, and investors may lose interest until the next cycle is about to get rolling.

ADBE 1-yr chart:

ADBE 1-yr chart

Disclosure: Author is long Adobe call options.

Source: Investors May Lose Interest Once Adobe's Current Product Cycle is Released