- New Trades -


Editor's Note:

(December 22, 2013)

Surprise! The market did not see another taper tantrum. Many were expecting stocks to move lower on a December announcement that the Federal Reserve would reduce their QE program. The market rallied instead as Ben Bernanke assured investors that interest rates would remain low for a long time.

The breakout to new all-time highs is certainly bullish. Bigger picture I do expect the path of least resistance to remain higher. Yet the next several days could be random as most market participants are on vacation and volume will be light. I suspect there is a good chance that stocks just meander sideways until yearend. Then the first several days of January could be bullish as mutual funds put new money to work.

Our watch list had another successful week with all three of our new candidates graduating to the active play list (BBT, MGM, and MTW). Tonight I am not adding any new trades although I would be tempted to go ahead and buy calls on the bullish breakout in CBI (one of our new watch list candidates).

On the radar screen below I do have a few favorites.
BA looks tempting and a close above $138 or $140 could be a potential entry point.
FL has been showing a lot of relative strength this past week. A dip back toward $40.00 might be an entry point.
UNP is a railroad and rail traffic has been improving. Shares of UNP are on the verge of a bullish breakout past $165.00. The recent consolidation in SNDK looks a bit like a bull-flag consolidation pattern. I would be tempted to buy calls on a close above $71.00.

Radar Screen:
Here is a list of stocks on my radar screen. These have potential to be LEAPS trades down the road if the right entry point presents itself:

BA*, FL*, UNP*, CAT, STX, MA, V, MSFT, INTC, LUV, ATVI, PII, TSCO, ITW, XLF, CAH, UA, CMI, ETN, JNPR, WNR, GRPN, NDAQ, SNDK*,