Garmin Ltd (NASDAQ: GRMN) shares are falling after an analyst at Needham downgraded the stock from "Buy" to "Hold," saying it has exceeded its $48 price target. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on GRMN.

After hitting a one-year high of $125.68 in October, the stock fell to make its one-year low of $39.75 in April. This morning, GRMN opened at $49.32. So far today the stock has hit a low of $48.17 and a high of $49.33. As of 1:30, GRMN is trading at $48.68, down 1.34 (-2.68%). The chart for GRMN looks neutral but improving while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $70 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in five months as long as GRMN is below $70 at October expiration. Garmin would have to rise by more than 34% before we would start to lose money. Learn more about this type of trade here.

GRMN hasn't been above $70 since January and has shown resistance around $55 recently. This trade could be risky if the company's earnings (due out in late July or early August) are a positive surprise, but even if that happens, this position could be protected by resistance GRMN might find around $62 where it formed a top back in March.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in GRMN.