- New Trades -


Caterpillar - CAT - close: 90.51

Company Info

Why We Like It:
CAT is in the industrial goods sector. The company makes construction and mining equipment. The stock was dead money for most of 2013. The company suffered a year if disappointing earnings numbers and concerns over its mining equipment sales. Worries remain that mining equipment could be a drag in 2014. However, it would appear that all the bad news has been priced in. Shares of CAT have broken out from a multi-month consolidation and the bounce this past week looks like a bullish entry point.

I do consider this somewhat of an aggressive play. CAT's earnings report is coming up in the next two or three weeks. No date has been announced yet but it's around the end of January. A disappointing report could send the stock plunging lower again. We're going to jump in now but I'm suggesting small positions. We'll use a tighter stop at $87.45.

Our long-term target is the $105-110 zone. Currently the point & figure chart is forecasting at $110 target.

Remember, start with small positions!

- Suggested Positions -
JAN 13, 2014 - entry price on CAT @ --.--, option @ -.--
symbol: CAT1517a100 2015 JAN $100 call - current bid/ask $ 3.20/ 3.30

- or -

JAN 13, 2014 - entry price on CAT @ --.--, option @ -.--
symbol: CAT1615a105 2016 JAN $105 call - current bid/ask $ 4.75/ 5.30

Chart of CAT:

Current Target: $112.00
Current Stop loss: 87.50
Play Entered on: 01/13/14
Originally listed in the New Plays 01/12/14


Juniper Networks - JNPR - close: 23.54

Comments:
01/12/14: Shares of JNPR spent most of the week consolidating sideways inside the $22.50-23.00 zone. Then on Friday afternoon the stock broke out and surged to new two-year highs. We had JNPR on our watch list with a suggested entry point to buy calls if shares closed above $23.25. That condition was met on Friday. Our play opens on Monday morning. However, more conservative investors may want to wait until after JNPR reports earnings on January 23rd. Waiting to see how the market reacts to JNPR's results and guidance before initiating positions might be the wiser move.

Tonight I am adjusting our stop loss to $20.45. Our long-term target is the $28-30 zone. The point & figure chart's target has risen from $29 to $32.

BUY the 2015 Jan $25 call (JNPR1517a25) current ask $2.87

- or -

BUY the 2016 Jan $25 call (JNPR1615a25) current ask $4.75

Chart of JNPR:

Current Target: exit calls when JNPR hits $28
Current Stop loss: 20.45
Play Entered on: 01/13/14
Originally listed on the Watch List: 01/05/14


SanDisk - SNDK - close: 72.60

Company Info

Why We Like It:
SNDK is in the technology sector. The company manufactures flash storage memory drives. A lot of their products are used in smartphones, tablets, and laptops. The stock was a big performer in 2013 and the momentum is still going with a breakout to new all-time highs this past week. The world's demand for memory is only growing and SNDK seems the beneficiary of that trend.

I will point out that SNDK is due to report earnings on January 22nd and after such a strong rally in 2013 any miss in the earnings report would be an excuse to sell. More conservative investors may want to wait until after the earnings report comes out before initiating new positions.

Tonight we're suggesting small bullish positions at the opening bell on Monday morning. We'll try and limit our risk with a stop loss at $67.00. Our long-term target is $90. Coincidentally the point & figure chart is forecasting at $90 target.

- Suggested Positions -
JAN 13, 2014 - entry price on SNDK @ --.--, option @ -.--
symbol: SNDK1517a80 2014 JAN $80 call - current bid/ask $ 5.60/ 5.80

Chart of SNDK:

Current Target: $90.00
Current Stop loss: 67.00
Play Entered on: 01/13/14
Originally listed in the New Plays 01/12/14