Option Investor
Newsletter

Daily Newsletter, Sunday, 1/5/2014

Table of Contents

  1. Leaps Trader Commentary
  2. Portfolio
  3. New Plays
  4. Play Updates
  5. Watch

Leaps Trader Commentary

Stocks Stumble Into 2014

by James Brown

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The stock market ended 2013 like fireworks - bright and loud. Stocks ended the year at their highs and immediately suffered a hangover the next trading day on Thursday, January 2nd. Normally the first day of January tends to be up and Thursday was the first time in five years that the first day of trading was down. That caught everyone's attention. An old market maxim says that so goes January so goes the year. That's because 73% of the time, over the last 85 years, that market maxim has been correct. There is another January indicator that narrows it down from the entire month to just the first five days. The next three days could impact trader sentiment.

Thus far 2014 is off to a shaky start. As I mentioned earlier the big sell off on Thursday was a surprise. The best explanation I heard was investors were selling their winners to lock in gains and postpone the tax consequences into 2015. Normally you would think of tax selling in December but that's to sell your losers before yearend. Thursday's weakness was mostly investors selling their winners. 2013 was definitely a winner and was only the tenth year in history that the S&P 500 index never closed negative for the year? 2014 has already blown its chance to repeat that feat. The S&P 500 is off -0.9% year to date. The NASDAQ composite is off -1.0% and the small cap Russell 2000 index is down -0.65% year to date. Meanwhile gold, which had a terrible year in 2013, is bouncing and up +2.69% in 2014. Thus far big banks and airline stocks have been strong performers in 2014 as well.

Economic Data

Most of the economic data last week was positive. The ISM index saw its December reading hit 57.0, which marked seven months of positive readings in a row (numbers above 50.0 are positive). Construction spending in the U.S. hit its highest levels since 2009 with a +1.0% rise in November. Consumer confidence came in better than expected with a rise from 72.0 to 78.1. The New York ISM data came in positive for the fifth month in a row with a rise from 608.5 to 615.4. Unfortunately the Chicago PMI dropped from 63.0 to 59.1, which was worse than expected. We also saw the pace of vehicle sales in December slow from 16.4 million to 15.4 million, which is pretty dramatic. We shouldn't be too concerned since total sales in 2013 hit 15.6 million, the strongest pace since 2007.

Overseas Data

Economic data overseas was mixed with most good news out of Europe and bad news out of Asia. Germany, Italy, and Spain all saw their manufacturing PMI data improve and all of them were in positive territory above 50.0. France was the standout decliner with French manufacturing PMI falling from 47.1 to 47.0. Altogether the Eurozone saw its manufacturing PMI stay unchanged at 52.7. Numbers above 50.0 are positive. In other news we saw Latvia enter the Eurozone bumping the number of countries sharing the Euro currency to 18. Latvia is a northeastern European country sandwiched between Lithuania and Estonia.

China was used as another excuse to sell thanks to weak economic data. Chinese manufacturing PMI data fell from 51.4 to 51.0. Their non-manufacturing PMI data slipped from 56.0 in November to 54.6 in December. The market is worried because the Chinese economy seems to be slowing down and hitting growth levels not seen since the year 1999.

Major Indices:

The S&P 500 index closed 2013 at new all-time highs at 1848. Since then it has seen a minor drop toward short-term technical support at its rising 10-dma. If this pullback continues then the S&P 500 could slide toward support in the 1800-1810 area. There has been concern that the market could see a -3% to -5% correction. If that were to occur it would mean a drop into the 1790-1755 zone for the S&P 500. If we see the S&P 500 breakdown below 1800 I would not be surprised to see a drop toward support near 1775.

chart of the S&P 500 index:

The NASDAQ composite ended 2013 at new 13-year highs at 4,176. It too has since dipped toward its simple 10-dma. If this pullback continues the next likely support levels appear to be the 4070 level and the 4000 level or possibly the 50-dma (near 4000).

chart of the NASDAQ Composite index:



The small cap Russell 2000 index ($RUT) ended 2013 at an all-time closing high (1,163). Like its big cap rivals the $RUT has also dipped to its simple 10-dma. If this pullback continues the 1135-1140 zone might offer some support but I would bet on a dip closer to its trend line of higher lows near 1120. If 1120 fails then we're looking at a drop to 1100 and the bottom edge of its long-term bullish channel.

chart of the Russell 2000 index



Economic Data & Event Calendar

It is the first full week of a new month and that means lots of economic data. Janet Yellen is expected to be confirmed as the next Federal Reserve Chairman on Monday. The ECB will announce its next interest rate decision on Thursday but no one expects any changes from the ECB. Thus the potential market moving event is Friday's nonfarm payrolls (jobs) report. Last month the jobs report came in at +203,000 and this number is expected to be revised higher. The estimate for December is currently about +195,000 but that could vary wildly based on the pace of temporary workers hired for the holidays.

Economic and Event Calendar

- Monday, January 06 -
factor orders data from November
ISM Services for December
Eurozone services PMI data
Janet Yellen confirmation as Fed Chairman

- Tuesday, January 07 -
Eurozone unemployment data

- Wednesday, January 08 -
ADP Employment Change report (private payrolls)
FOMC Minutes from December meeting
Eurozone retail sales data

- Thursday, January 09 -
Weekly Initial Jobless Claims
Chinese industrial production numbers
European Central Bank (ECB) interest rate decision

- Friday, January 10 -
wholesale inventory data from November
nonfarm payrolls jobs report for December
unemployment rate from December

Additional Events to be aware of:

Jan. 20th - stock market closed for Martin Luther King day
Jan. 28th - President Obama's state of the union address
Jan. 29th - FOMC policy update
Feb. 7th - U.S. debt ceiling is reached




Looking Ahead:

On a short-term basis we could see tech stocks and anything related to personal electronics get a boost thanks to the Consumer Electronics Show (CES) in Vegas this week. The CES will last from January 7th through the 10th and we'll be hearing about lots of goodies due to be launched in 2014.

Market technicians will be focused on the first five days of January. Normally traders expect an upward bias for stocks as fund managers put new money to work. Unfortunately not everyone is bullish for January. Long-time market veteran Art Cashin, who still works the floor of the NYSE, said we could see a -3% to -5% pullback in January. If that's true I would expect it the decline to start once earnings season begins. Alcoa (AA) kicks off earnings season on January 9th but it will be the next week that earnings season really picks up speed. Corporate guidance could play a major role in setting the tone for the first quarter of 2014.

Looking further out into the new year we have Sam Stovall, an analyst with S&P, who pointed out that mid-term election years tend to be more volatile for the market. He said we should expect a higher than normal chance of -5% declines this year. Normally the market sees a correction at least once every 18 months. Thus far we've made it 27 months so we're definitely due for one.

Over the last few weeks I have pointed out multiple warning signals that the market could be near a top and due for a significant pullback. However, we all know that the market can remain overbought a lot longer than what we might think is normal. If I had to pick a time period for the market to see a decline it would be the last three weeks of January as investors react to earnings news. Of course there is a chance that earnings results come in better than expected and actually renew the rally.

James



Portfolio

Portfolio Update

by James Brown

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Current Portfolio


Portfolio Comments:

After a stellar performance in 2013 the markets have stumbled into 2014 with a weak first two days of trading. The markets major indices look poised for more profit taking.

I am suggesting we exit our 2014 DG calls immediately on Monday morning, January 6th. We also want to exit completely from our SBUX trade on Monday morning.

I have updated stop losses on: BAC, DE, DIS, JPM, VRSN, and WDC.

Disclaimer: At any given time the author may have positions in any or all of any companies mentioned in the Leaps Newsletter.

--Position Summary Table--
Table lists Directional CALL or PUT/LEAPS only.
Insurance puts, if applicable, are not shown.

Red symbol/name represents a play or option position exited or closed this week.





New Plays

Reloading The Radar

by James Brown

Click here to email James Brown


- New Trades -


Editor's Note:

(January 05, 2014)

The chase for performance was a major driver for the markets in the fourth quarter of 2013. Now the calendar has rolled over into 2014 and the performance meter for fund managers has been reset to zero.

On a short-term basis the market is overbought. The next week and the next month (January) could play a pivotal role in determining investor sentiment. Corporate earnings results and guidance will also be a major factor in driving stocks higher or lower for the next several weeks. Odds are good that we will see a lot of post-earnings sell offs as investors take profits after such a strong 2013. I suggest we watch these declines for potential entry points if the sell off was overdone or undeserved.

I am not adding new trades tonight but I am reloading our radar screen, which is full of potential trading ideas.

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. In no particular order:

UNH, JBHT, DLPH, KBH, ATVI, SKX, DECK, NDAQ, CAR, SNDK, WLT, SYK, TRMB, CCMP, HAIN, PHM, RYL, UTX, NTGR, MAS, SWI, TSCO, GM, YUM, INTC, AMD, CAT, CSX, UNP, MET, XOM, BRK.B, V, KSS, WHR, MHK, GS, MS, CMI, Z, MRK, BA, LMT, GD, UA, ESRX, DAL, ETFC, SCHW, DISCA,



Play Updates

Widespread Pullback

by James Brown

Click here to email James Brown

Editor's Note:

The U.S. market is seeing a widespread pullback from its highs set New Year's Eve.


Closed Plays


NVDA was closed as planned on Monday, December 30th.



Play Updates


American Intl. Group - AIG - close: 50.92

Comments:
01/05/14: It was a relatively quiet holiday week for AIG. Shares are currently churning sideways near its 10-dma. I am not suggesting new positions. We're down to our last two weeks for the 2014 January calls. At this point we would be lucky to breakeven. I am adjusting our exit price to close the 2014 calls to $52.00.

I am not suggesting new positions at this time.

- Suggested Positions -
JUL 15, 2013 - entry price on AIG @ 46.99, option @ 2.50
symbol: AIG1418a50 2014 JAN $50 call - current bid/ask $1.27/1.31

- or -

JUL 15, 2013 - entry price on AIG @ 46.99, option @ 4.05
symbol: AIG1517a55 2015 JAN $55 call - current bid/ask $3.50/3.65

01/05/14 adjust the exit for the 2014 calls down to $52.00
12/29/13 new stop loss @ 47.75
10/20/13 new stop loss @ 46.40
10/13/13 exit strategy update: exit 2014 calls at $54.50
adjust the exit target for the 2015 calls to $59.00
09/15/13 new stop loss @ 44.65
08/04/13 new stop loss @ 43.75
...please see earlier updates for more history...

Current Target:$ exit 2014 calls @ 52.00, exit 2015 calls @ 59.00
Current Stop loss: 47.75
Play Entered on: 07/15/13
Originally listed on the Watch List: 06/01/13


Avago Technologies - AVGO - close: 52.85

Comments:
01/05/14: AVGO also delivered a quiet week with shares hovering in the $52-53 area. If AVGO does see a pullback we can look for potential support near $50.00 or near $48.00. I am not suggesting new positions at this time.

- Suggested Positions -
NOV 11, 2013 - entry price on AVGO @ 44.44, option @ 3.60
symbol: AVGO1517a50 2015 JAN $50 call - current bid/ask $7.20/7.90

12/29/13 new stop loss @ 45.90
12/22/13 new stop loss @ 44.90, adjust exit target to $58.50
12/08/13 new stop loss @ 42.40
11/24/13 AVGO is not participating in the market rally.
investors may want to exit early now to cut their losses.
11/11/13 trade opens.
11/10/13 promoted from watch list to new play.
11/03/13 adjust trigger to $43.00
10/27/13 removed the 2014 call
10/20/13 adjust the buy-the-dip trigger to $43.50
adjust the stop loss to $39.40 & adjust the option strikes
adjust the 2014 exit target to $49.50
adjust the 2015 exit target to $54.00
10/13/13 adjust the buy-the-dip trigger from $40.00 to $40.50

Current Target: $58.50
Current Stop loss: 45.90
Play Entered on: 11/11/13
Originally listed on the Watch List: 09/22/13


Bank of America - BAC - close: 16.41

Comments:
01/05/14: An analyst upgrade to a "buy" rating on Thursday helped launch shares of BAC higher. The stock broke through resistance at the $16.00 level and the rally continued on Friday with a +1.9% gain. More conservative traders may want to take profits now with our 2015 call option more than doubling in value. Tonight I am raising the stop loss to $14.75. I'm not suggesting new positions.

FYI: BAC is scheduled to report earnings on January 15th.

- Suggested Positions -
(exit target hit on 07/23/13 @ $15.00)
MAR 18, 2013 - entry price on BAC @ 12.29, option @ 0.44
symbol: BAC1418a15 2014 JAN $15 call - exit $1.04 (+136.3%)

- or -

MAR 18, 2013 - entry price on BAC @ 12.29, option @ 1.13
symbol: BAC1517a15 2015 JAN $15 call - current bid/ask $2.54/2.56

01/05/14 new stop loss @ 14.75
11/24/13 new stop loss @ 13.70
11/17/13 new stop loss @ 13.35
07/23/13 $15.00 exit target hit for the 2014 Jan. $15 calls.
07/20/13 new stop loss @ 12.75. Adjust the exit target for the 2014 calls to exit when BAC hits $15.00. Our exit for the 2015 calls is $18.00 on BAC
07/07/13 new stop loss @ 11.35
05/04/13 BAC did not participate in the market's rally this past week. Investors should turn more defensive here.

Current Target: BAC @ $18 for 2015 call
Current Stop loss: 14.75
Play Entered on: 03/18/13

Originally listed on the Watch List: 03/09/13


BB&T Corp. - BBT - close: 36.93

Comments:
01/05/14: BBT suffered a minor decline for the weeks thanks to Thursday's sell off. Shares still look vulnerable here and I would not be surprised to see a correction back toward support near $36.00. More conservative investors might want to consider a stop loss closer to support near $35.00.

FYI: BBT is scheduled to report earnings on January 16th.

- Suggested Positions -
DEC 17, 2013 - entry price on BBT @ 35.81, option @ 0.99
symbol: BBT1517a40 2015 JAN $40 call - current bid/ask $1.09/1.15

Current Target: BBT @ 42.50
Current Stop loss: 32.95
Play Entered on: 12/17/13
Originally listed on the Watch List: 12/15/13


Capital One Financial - COF - close: 77.34

Comments:
01/05/14: COF was a strong performer last week with shares extending their gains to three up weeks in a row. COF ended the week at new multi-year highs. Shares look short-term overbought here and likely due for a dip. I'm not suggesting new positions at this time.

FYI: COF is scheduled to report earnings on January 16th.

- Suggested Positions -
NOV 29, 2013 - entry price on COF @ 71.69, option @ 5.80*
symbol: COF1517a75 2015 JAN $75 call - current bid/ask $8.10/8.40

12/29/13 new stop loss @ 69.45
12/22/13 new stop loss @ 68.35
*option entry price is an estimate since the option did not trade at the time our play was opened.

Current Target: COF @ 84.00 for 2015 calls
Current Stop loss: 69.45
Play Entered on: 11/29/13
Originally listed on the Watch List: 11/17/13


E.I. du Pont - DD - close: 63.78

Comments:
01/05/14: The end of 2013 saw shares of DD rally to levels not seen since early 2000 near $65.00. There was immediate profit taking on Thursday but shares seem to be holding at their 10-dma for now. Do not be surprised to see a correction toward support near $62.00.

Our plan was to exit our 2014 calls on Monday, December 30th at the open. I am not suggesting new positions.

FYI: DD is scheduled to report earnings on January 28th.

- Suggested Positions -
OCT 25, 2013 - entry price on DD @ 62.57, option @ 0.74
symbol: DD1418a65 2014 JAN $65 call - exit $0.69 (-6.7%)

- or -

OCT 25, 2013 - entry price on DD @ 62.57, option @ 3.15
symbol: DD1517a65 2015 JAN $65 call - current bid/ask $3.95/4.05

12/30/13 planned exit for 2014 calls.
12/29/13 prepare to exit 2014 calls on Monday, Dec. 30th at the open.
12/08/13 new stop loss @ 58.90
10/25/13 trade opens. DD gaps higher a $62.57
10/24/13 DD closed above our trigger @ 60.75
09/22/13 adjust entry: wait for a close above $60.75
instead of a close above $60.50

Current Target: DD @ 69.00
Current Stop loss: 58.90
Play Entered on: 10/25/13
Originally listed on the Watch List: 08/11/13


Deer & Co - DE - close: 90.66

Comments:
01/05/14: DE lost four cents for the week and our 2015 option went up 10 cents. The stock seems to be consolidating in what looks like a potential bull-flag pattern. However, if shares breakdown below round-number support at $90.00 the next level of support should be the $88.00 area. I am raising our stop loss to $84.40. I am not suggesting new positions at this time.

- Suggested Positions -
DEC 10, 2013 - entry price on DE @ 87.26, option @ 5.85*
symbol: DE1517a90 2015 JAN $90 call - current bid/ask $7.40/7.50

01/05/14 new stop loss @ 84.40
12/22/13 new stop loss @ 83.75
12/10/13 trade opens. DE @ 87.26
*option entry price is an estimate since the option did not trade at the time our play was opened.
12/09/13 DE closed @ 87.20, above our suggested entry of a close above $86.25

Current Target: DE @ 98.50
Current Stop loss: 84.40
Play Entered on: 12/10/13
Originally listed on the Watch List: 12/08/13


Dollar General Corp. - DG - close: 60.98

Comments:
01/05/14: DG managed a gain for the week but shares remain stuck under resistance near $62.00. We have two weeks left on our 2014 calls and then they expire. If DG breaks out higher then this position could turn into a winner. If DG declines from here these calls will evaporate quickly. One potential wildcard is rival Family Dollar (FDO) will report earnings on January 9th (this coming Thursday morning). FDO's results could heavily influence shares of DG either direction. With just two weeks left we will exit our 2014 calls immediately on Monday morning. More aggressive investors might want to risk holding on. I am not suggesting new positions.

Earlier Comments:
Our target is $69.00 for the 2015 calls. FYI: The point & figure chart is bullish with a $78.00 target.

- Suggested Positions -
SEP 06, 2013 - entry price on DG @ 57.61, option @ 2.58
symbol: DG1418a60 2014 JAN $60 call - current bid/ask $1.80/1.95

- or -

SEP 06, 2013 - entry price on DG @ 57.61, option @ 3.48
symbol: DG1517a70 2015 JAN $70 call - current bid/ask $3.60/4.00

01/05/14 prepare to exit 2014 calls immediately on Monday morning
11/17/13 new stop loss @ 54.75
09/22/13 new stop loss @ 53.60

Current Target: 64.00 for the 2014s, 69.00 for the 2015s
Current Stop loss: 54.75
Play Entered on: 09/06/13
Originally listed on the Watch List: 08/04/13


The Walt Disney Co. - DIS - close: 76.11

Comments:
01/05/14: DIS surged to new highs on Monday, December 30th thanks to an upgrade to a "buy" that morning. The stock spent the rest of the week consolidating sideways above the $76.00 level. If DIS does see any profit taking the nearest area of support is probably the $72.00-73.50 area. I am not suggesting new positions. We will raise our stop loss to $69.40.

FYI: DIS is scheduled to report earnings on February 5th.

- Suggested Positions -
OCT 23, 2013 - entry price on DIS @ 68.81, option @ 3.70
symbol: DIS1517a75 2015 JAN $75 call - current bid/ask $7.55/7.70

01/05/14 new stop loss @ 69.40
12/29/13 new stop loss @ 67.40
12/08/13 new stop loss @ 65.75
11/24/13 new stop loss @ 64.75

Current Target: DIS @ 84.00
Current Stop loss: 69.40
Play Entered on: 10/23/13
Originally listed on the Watch List: 10/13/13


Dick's Sporting Goods - DKS - close: 57.59

Comments:
01/05/14: Trading was muted in DKS last week. The stock churned sideways inside the $57.50-58.50 zone. If the market turns south we can look for DKS to dip toward $56 or its 50-dma. I am not suggesting new positions at this time.

Our long-term target is $65.00. More aggressive traders could aim higher. The point & figure chart is already bullish and forecasting at $71 target.

- Suggested Positions -
NOV 12, 2013 - entry price on DKS @ 54.73, option @ 4.00*
symbol: DKS1517a60 2015 JAN $60 call - current bid/ask $4.50/4.90

11/12/13 trade opens. DKS opens at $54.73
*option entry price is an estimate since the option did not trade at the time our play was opened.
11/11/13 closed about our suggested entry trigger (above 54.50)
10/27/13 removed the 2014 call.

Current Target: DKS @ 65.00
Current Stop loss: 49.95
Play Entered on: 11/12/13
Originally listed on the Watch List: 10/06/13


Freeport-McMoRan - FCX - close: 37.32

Comments:
01/05/14: FCX spent last week struggling with resistance near its 2013 highs near the $38.00 level. The stock is starting to retreat and too much weakness here will look like a bearish double top pattern. I am not suggesting new positions at this time.

FYI: Gold prices saw a big bounce off their lows but the overall trend for gold is still down. Copper prices retreated from their recent highs. If both of these metals start heading down together it could put pressure on FCX shares.

- Suggested Positions -
NOV 13, 2013 - entry price on FCX @ 35.25, option @ 2.60*
symbol: FCX1517a39 2015 JAN $39 call - current bid/ask $2.86/2.92

12/29/13 new stop loss @ 33.45
11/13/13 FCX hits our buy-the-dip entry point at $35.25
*option entry price is an estimate since the option did not trade at the time our play was opened.
10/27/13 strategy update: removed the 2014 calls
adjust the buy-the-dip trigger to $35.25 and the stop to $32.25.
adjust the option strike to the 2015 Jan $39 call

Current Target:$ 42.50
Current Stop loss: 33.45
Play Entered on: 11/13/13
Originally listed on the Watch List: 09/15/13


Fluor Corp. - FLR - close: 79.15

Comments:
01/05/14: The profit taking on Thursday pulled FLR from its multi-year highs. Shares look like they're headed for their 50-dma. If the selling gets too hot we could see FLR testing the $75.00 level again. I am not suggesting new positions at this time.

Earlier Comments:
We will plan to exit our 2015 calls when FLR trades at $88.00.

- Suggested Positions -
SEP 12, 2013 - entry price on FLR @ 67.14, option @ 2.90
symbol: FLR1418a70 2014 JAN $70 call - exit $9.30 (+220.6%)

- or -

SEP 12, 2013 - entry price on FLR @ 67.14, option @ 5.70*
symbol: FLR1517a75 2015 JAN $75 call - current bid/ask: 10.40/10.70

12/22/13 new stop loss @ 74.40
11/24/13 new stop loss @ 72.75
11/13/13 exit target hit for 2014 Jan. $70 calls
11/10/13 new stop loss @ 71.40
10/31/13 FLR reported earnings and management lowered guidance
10/20/13 new stop loss @ 68.80
adjust exit targets: Target for 2014 call is $79.00
target for 2015 call is $88.00
09/22/13 new stop loss @ 64.75
09/22/13 adjust exit target from $74.75 to $79.50
09/20/13 high for the day was $74.72
*option entry price is an estimate since the option did not trade at the time our play was opened.

Current Target:$ Target for 2014 call is $79.00,
Target for 2015 is $88.00
Current Stop loss: 74.40
Play Entered on: 09/12/13
Originally listed on the Watch List: 08/11/13


General Electric - GE - close: 27.48

Comments:
01/05/14: GE closed the year at a new five-year highs. Profit taking on Thursday pushed GE back toward support near $27.50. Investors could use this dip as a new entry point. On a side note, I'm a little surprised that GE did not perform better last week. Jim Cramer offered his opinion that GE should rally past $40 in 2014.

FYI: GE is scheduled to report earnings on January 17th. We can expect to see an increase in volatility following the announcement.

Earlier Comments:
Keep in mind that GE doesn't move very fast so we'll need to be patient.

- Suggested Positions -
DEC 27, 2013 - entry price on GE @ 27.84, option @ 1.19
symbol: GE1517a30 2015 JAN $30 call - current bid/ask: 1.05/ 1.08

- or -

DEC 27, 2013 - entry price on GE @ 27.84, option @ 1.96
symbol: GE1615a30 2016 JAN $30 call - current bid/ask: 1.90/ 1.91

Current Target: GE in the $32.50-35.00 zone.
Current Stop loss: 25.95
Play Entered on: 12/27/13
Originally listed on the Watch List: 12/22/13


Home Depot, Inc. - HD - close: 81.89

Comments:
01/05/14: HE spent the week struggling with short-term resistance near $82.50. I would not be surprised to see shares dip back toward round-number support at $80.00 if the market continues to sink.

Earlier Comments:
Our long-term target is $99.00. FYI: The point & figure chart is bullish with a $97 target.

- Suggested Positions -
DEC 27, 2013 - entry price on HD @ 81.65, option @ 3.40
symbol: HD1517a90 2015 JAN $90 call - current bid/ask: 3.30/ 3.40

- or -

DEC 27, 2013 - entry price on HD @ 81.65, option @ 6.55
symbol: HD1615a90 2016 JAN $90 call - current bid/ask: 6.20/6.65

Current Target: HD at $99.00
Current Stop loss: 76.75
Play Entered on: 12/27/13

Originally listed on the Watch List: 12/01/13


HollyFrontier Corp. - HFC - close: 49.36

Comments:
01/05/14: Both the stock and our 2015 option ended the week virtually unchanged. Shares of HFC have been trying to breakout past round-number resistance near $50.00 but they're not having much success. Friday's high was $50.28. A close above this level could be used as an alternative entry point to launch positions. Bear in mind that I am cautious on this trade given HFC's recent volatility over the last few weeks. If you're launching positions I would start small.

Earlier Comments:
NOTE: The options for HFC have changed. Due to a 50-cent special dividend the option strikes have all been adjusted down by 50 cents. Our listed option strike 2015 January $49.50 has become $49.00.

- Suggested Positions -
NOV 26, 2013 - entry price on HFC @ 47.17, option @ 5.00*
symbol: HFC1517a49 2015 JAN $49 call - current bid/ask $6.10/6.60

12/15/13 new stop loss @ 43.75
*option entry price is an estimate since the option did not trade at the time our play was opened.

Current Target: HFC @ 59.00
Current Stop loss: 43.75
Play Entered on: 11/26/13
Originally listed on the Watch List: 11/24/13


Harley-Davidson - HOG - close: 68.91

Comments:
01/05/14: HOG has been slowly drifting lower. If this trend continues shares might see some short-term support near $68.00. Any significant sell off could pull shares down toward support near $66.00. I am not suggesting new positions.

FYI: HOG is scheduled to report earnings on January 30th.

Earlier Comments:
Our exit target for the 2015 calls remains $74.50 for now.

- Suggested Positions -
(exited 2014 calls on Monday, December 9th, 2013)
SEP 04, 2013 - entry price on HOG @ 61.01, option @ 2.36
symbol: HOG1418a65 2014 JAN $65 call - closed @ 3.70 (+56.7%)

- or -

SEP 04, 2013 - entry price on HOG @ 61.01, option @ 4.35*
symbol: HOG1517a70 2015 JAN $70 call - current bid/ask $ 6.30/6.50

12/29/13 new stop loss @ 63.75
12/09/13 planned exit for 2014 calls. option @ $3.70 (+56.7%)
12/08/13 prepare to exit 2014 calls immediate on Monday morning
12/08/13 new stop loss @ 62.75
11/17/13 new stop loss @ 61.45
adjust the exit target for 2015 calls to $74.50
10/20/13 do not be surprised to see some profit taking after HOG reports earnings on Oct. 22nd.
09/22/13 new stop loss @ 59.00
*note the entry price on our 2015 call is an estimate since the option did not trade at the time our play opened.

Current Target: exit exit 2015 calls @ 74.50
Current Stop loss: 63.75
Play Entered on: 09/04/13
Originally listed on the Watch List: 08/25/13


Honeywell Intl. - HON - close: 90.52

Comments:
01/05/14: HON hit new all-time highs last week. Unfortunate the profit taking on Thursday has pulled shares back toward short-term technical support at their 10-dma. If the market actually sees a correction we could see HON retesting the $86-87 area.

Earlier Comments:
Our initial plan was to keep our position size small to limit risk.

- Suggested Positions -
(closed the 2014 calls on May 20th at the open)
MAY 07, 2013 - entry price on HON @ 76.20, option @ 2.68
symbol: HON1418a80 2014 JAN $80 call - exit $5.10 (+90.2%)

- or -

MAY 07, 2013 - entry price on HON @ 76.20, option @ 4.10
symbol: HON1517a85 2015 JAN $85 call - current bid/ask $ 9.95/10.15

12/29/13 new stop loss @ 84.85
12/22/13 adjust the exit target to $98.00
11/24/13 new stop loss @ 83.75
11/17/13 new stop loss @ 82.75
11/10/13 new stop loss @ 81.75
10/20/13 new stop loss @ 79.40
10/13/13 investors might want to take profits on our 2015 calls, which have doubled in value.
...please see earlier newsletter for prior comments...

Current Target:$ 98.00
Current Stop loss: 84.85
Play Entered on: 05/07/13
Originally listed on the Watch List: 05/04/13



Helmerich & Payne, Inc. - HP - close: 83.05

Comments:
01/05/14: We see a similar story with HP. The stock tagged new all-time highs before yearend and then sank on Thursday's market sell off. There should be support near the $80.00 level. I am not suggesting new positions at this time.

FYI: HP is scheduled to report earnings on January 30th.

- Suggested Positions -
DEC 05, 2013 - entry price on HP @ 81.00, option @ 5.60*
symbol: HP1517a90 2015 JAN $90 call - current bid/ask $ 5.60/6.00

12/29/13 new stop loss @ 77.45
12/05/13 trade opens with HP opening at $81.00
*option entry price is an estimate since the option did not trade at the time our play was opened.
12/04/13 HP closes at $80.97, above our suggested trigger @ 80.25
11/17/13 strategy change: Wait for HP to close above $80.25 and then buy calls the next day with a stop loss at $74.75. Our new long-term target is $95.00. New option strike at 2015 $90 call

Current Target:$ 95.00
Current Stop loss: 77.45
Play Entered on: 12/05/13
Originally listed on the Watch List: 10/27/13


JPMorgan Chase & Co. - JPM - close: 58.66

Comments:
01/05/14: JPM was showing some relative strength last week with a rally to new 10-year highs. It is possible that the $60.00 level could be round-number resistance for JPM. It's also likely that JPM could see some profit taking after they report earnings on January 14th. I am not suggesting new positions at this time. I am adjusting our stop loss to $52.90.

FYI: JPM is scheduled to report earnings on January 14th.

- Suggested Positions -
(2014 call exit on Monday, December 23rd)
JUN 24, 2013 - entry price on JPM @ 50.25, option @ 1.60
symbol: JPM1418a55 2014 JAN $55 call - exit $3.05 (+90.6%)

- or -

JUN 24, 2013 - entry price on JPM @ 50.25, option @ 3.80
symbol: JPM1517a55 2015 JAN $55 call - current bid/ask $ 6.80/6.90

01/05/14 new stop loss @ 52.90
12/23/13 planned exit for 2014 calls, option @ +90.6%
12/22/13 prepare to exit the 2014 calls on Monday morning, Dec. 23rd
12/01/13 adjust exit target for the 2014 calls to exit when JPM hits $59.50
11/24/13 new stop loss @ 51.95
Consider taking profits on the 2014 calls now
09/01/13 adjust stop loss to $48.99
07/21/13 new stop loss @ 49.65
07/14/13 new stop loss @ 48.75
Current Target: exit 2015 calls when JPM hits $64.00
Current Stop loss: 52.90
Play Entered on: 06/24/13
Originally listed on the Watch List: 05/25/13


Level 3 Communications - LVLT - close: 32.60

Comments:
01/05/14: LVLT hit new two-year highs by the close of 2013. Shares started to see some profit taking on Friday. If this pullback continues then broken resistance near $31.00 should be significant support.

FYI: LVLT is scheduled to report earnings on February 5th.

- Suggested Positions -
OCT 31, 2013 - entry price on LVLT @ 29.39, option @ 4.40*
symbol:LVLT1517a30 2015 JAN $30 call - current bid/ask $ 5.60/6.00

12/29/13 new stop loss @ 28.75
12/08/13 new stop loss @ 27.75
11/24/13 new stop loss @ 26.75
*option entry price is an estimate since the option did not trade at the time our play was opened.
Current Target: $39.00
Current Stop loss: 28.75
Play Entered on: 10/31/13
Originally listed on the Watch List: 10/20/13


MGM Resorts - MGM - close: 23.45

Comments:
01/05/14: Gambling stocks have continued to rally thanks to strong gambling revenue numbers coming out of Macau. Shares of MGM hit new multi-year highs and extended their gains to six up weeks in a row. However, MGM appears to be forming what could be a short-term top. The stock is clearly overbought and Friday's session has created a bearish engulfing candlestick reversal pattern. After such a big move higher I do expect MGM to correct lower. Nimble investors may want to exit their call options now to lock in a gain and then look to re-enter on a pullback.

I would expect MGM to decline back into the $21-22 zone. I am not suggesting new positions at this time.

- Suggested Positions -
DEC 17, 2013 - entry price on MGM @ 21.79, option @ 2.00
symbol: MGM1517a25 2015 JAN $25 call - current bid/ask $ 2.76/2.80

01/05/14 MGM could be forming a bearish reversal, expect a pullback from here
12/17/13 trade opens. MGM @ 21.79
12/16/13 MGM meets our entry requirement with a close above $21.50
Current Target: $26.00-28.00 zone
Current Stop loss: 19.35
Play Entered on: 12/17/13
Originally listed on the Watch List: 12/15/13


Motorola Solutions - MSI - close: 66.20

Comments:
01/05/14: We see a common story in MSI's performance last week. The stock rallied up into the last day of the year and then reversed with the market-wide sell off on Thursday. MSI is hovering near short-term support near $66.00. I would be cautious here. A breakdown below the $65.00 level could jeopardize its six-month up trend.

FYI: MSI is scheduled to report earnings on January 22nd.

Earlier Comments:
Currently our target is the $80-90 zone but we'll be more specific as the trade progresses. The point & figure chart is bullish with a long-term target at $91.00.

- Suggested Positions -
DEC 23, 2013 - entry price on MSI @ 66.75, option @ 4.10
symbol: MSI1517a70 2015 JAN $70 call - current bid/ask $ 3.60/3.80

- or -

DEC 23, 2013 - entry price on MSI @ 66.75, option @ 5.10
symbol: MSI1615a75 2016 JAN $75 call - current bid/ask $ 4.20/4.85

Current Target: Exit when MSI trades in the $80-90 zone.
Current Stop loss: 61.90
Play Entered on: 12/23/13
Originally listed on the Watch List: 12/08/13


The Manitowoc Co. - MTW - close: 23.46

Comments:
01/05/14: MTW bounced from short-term technical support at its rising 10-dma last week. The stock managed to eke out a small gain for the week thanks to Friday's rebound. Yet MTW remains under resistance in the $23.65 area. I would not be surprised to see a correction back toward the $22.00 area.

If you're looking for a new entry point I would consider waiting to buy calls on a dip near $22.00.

- Suggested Positions -
DEC 19, 2013 - entry price on MTW @ 22.33, option @ 2.85*
symbol: MTW1517a25 2015 JAN $25 call - current bid/ask $ 3.00/3.30

12/19/13 trade opens. MTW @ 22.33
*option entry price is an estimate since the option did not trade at the time our play was opened.
12/18/13 triggered with MTW close at $22.36, above our $22.10 trigger
Current Target: $28.00-30.00 zone
Current Stop loss: 19.90
Play Entered on: 12/19/13
Originally listed on the Watch List: 12/15/13


QUALCOMM Inc. - QCOM - close: 72.89

Comments:
01/05/14: It's a similar story in QCOM with the stock ending the year at a new multi-year high only to reverse the first two days of 2014. QCOM could see short-term support near $72.00 but the $70.00 level would be stronger support. If you're looking for a new entry point I would consider waiting for a dip closer to $70.

Earlier Comments:
I want to remind readers that QCOM does a lot of business with Apple (AAPL), and if AAPL encounters any bad news (example: lower iPhone sales) it could influence trading in shares of QCOM.

- Suggested Positions -
NOV 15, 2013 - entry price on QCOM @ 71.34, option @ 4.90
symbol: QCOM1517a75 2015 JAN $75 call - current bid/ask $5.10/5.25

12/08/13 new stop loss @ 67.75
11/15/13 trade opens. QCOM @ 71.34
11/14/13 QCOM closes above entry trigger (above 70.50)

Current Target: $85.00
Current Stop loss: 67.75
Play Entered on: 11/15/13
Originally listed on the Watch List: 11/03/13


Starbucks - SBUX - close: 76.95

Comments:
01/05/14: My fears about SBUX are coming true. The stock's oversold bounce has failed under new resistance at its 50-dma (under the $80 level). Shares look poised for a much deeper correction lower. It's possible that SBUX will bounce at $76.00 but I doubt it. I suspect SBUX is headed for $74 and possibly lower.

I am suggesting we exit immediately and cut our losses now. I will be adding SBUX to our watch list for a much lower buy-the-dip entry point.

- Suggested Positions -
DEC 04, 2013 - entry price on SBUX @ 80.00, option @ 4.70
symbol: SBUX1517a90 2015 JAN $90 call - current bid/ask $3.10/3.25

01/05/13 prepare to exit positions immediately on Monday, Jan 6th
12/15/13 The breakdown in SBUX this past week throws the up trend in question. Investors might want to exit early now to minimize losses
12/04/13 triggered on a dip at $80.00
12/01/13 adjust the trigger to $80.00
11/24/13 adjust the trigger to $79.25
adjust the option strike to the 2015 January $90 call
11/17/13 adjust the trigger to $78.25
11/10/13 adjust the buy-the-dip entry to $78.00 and stop to $74.75
11/03/13 adjust buy-the-dip entry from $76 to $77.00

Chart of SBUX:

Current Target: exit calls when SBUX hits $98.00
Current Stop loss: 74.75
Play Entered on: 12/04/13
Originally listed on the Watch List: 10/27/13


VeriSign, Inc. - VRSN - close: 59.84

Comments:
01/05/14: VRSN continues its slow and steady push higher. The stock ended the week at new multi-year highs. I am raising our stop loss to $55.75. VRSN is nearing the top of its bullish channel. More conservative investors may want to take profits now.

FYI: VRSN is scheduled to report earnings on February 6th.

Earlier Comments:
Our target to exit the 2015 calls is VRSN at $64.50.

- Suggested Positions -
(option exit on December 2nd, 2013)
SEP 19, 2013 - entry price on VRSN @ 51.40, option @ 1.16
symbol:VRSN1418a55 2014 JAN $55 call - exit @ $2.80** (+141.3%)

- or -

SEP 19, 2013 - entry price on VRSN @ 51.40, option @ 4.25*
symbol:VRSN1517a55 2015 JAN $55 call - current bid/ask $ 8.45/8.70

01/05/14 new stop loss @ 55.75
12/22/13 new stop loss @ $54.40
12/02/13 planned exit for the 2014 calls, option @ +141.3%
**option exit price is an estimate since the option did not trade at the time our play was closed.
12/01/13 prepare to exit our 2014 Jan. $55 calls on Monday, Dec. 2nd.
11/24/13 new stop loss @ 52.40
11/17/13 new stop loss @ 49.75
11/03/13 new stop loss @ 48.40
*option entry price is an estimate since the option did not trade at the time our play was opened.
09/15/13 adjust entry trigger: wait for a close over $50.50 instead of $50.25

Current Target:
Exit 2014 calls when VRSN hits $57.50, 2015 calls @ $64.50
Current Stop loss: 55.75
Play Entered on: 09/19/13
Originally listed on the Watch List: 08/18/13


Western Digital Corp. - WDC - close: 83.28

Comments:
01/05/14: WDC did not see any follow through on Thursday's profit taking, which is encouraging. If the market continues to dip look for WDC to test the $80 area. I am not suggesting new positions at this time.

Please note our new stop loss at $76.40.

Our long-term target is $94.00. FYI: The Point & Figure chart is bullish with a $91 target.

- Suggested Positions -
DEC 10, 2013 - entry price on WDC @ 77.00, option @ 6.00*
symbol: WDC1517a90 2015 JAN $90 call - current bid/ask $ 8.40/8.65

01/05/14 new stop loss at $76.40
12/22/13 new stop loss at $74.25
12/10/13 triggered on our buy-the-dip entry at $77.00
*option entry price is an estimate since the option did not trade at the time our play was opened.
12/08/13 adjust the entry point strategy to buy calls on a dip at $77.00 since we missed the breakout (see the December 8th, watch list update)
12/01/13 adjust entry point to a close above $76.50 instead of 76.25
adjust the stop loss to $69.75

Current Target: Exit 2015 calls when WDC hits $94.00
Current Stop loss: 76.40
Play Entered on: 09/19/13
Originally listed on the Watch List: 11/17/13


Wells Fargo & Co. - WFC - close: 44.34

Comments:
01/05/14: Friday's bounce from round-number support at $45.00 reduced WFC's loss for the week to just 16 cents. I would be tempted to buy calls here at current levels but more conservative investors may want to wait until after we see WFC's earnings and how the market reacts to its results.

FYI: WFC is scheduled to report earnings on January 14th.

- Suggested Positions -
DEC 26, 2013 - entry price on WFC @ 45.50, option @ 1.50
symbol: WFC1517a50 2015 JAN $50 call - current bid/ask $ 1.39/1.43

-- or --

DEC 26, 2013 - entry price on WFC @ 45.50, option @ 2.95*
symbol: WFC1615a50 2016 JAN $50 call - current bid/ask $ 2.75/3.00

12/26/13 trade opens with WFC @ $45.50
*option entry price is an estimate since the option did not trade at the time our play was opened.
12/24/13 WFC closed @ 45.39, above our trigger at $45.25

Current Target: Exit WFC hits $54.50
Current Stop loss: 41.95
Play Entered on: 12/26/13
Originally listed on the Watch List: 12/08/13


Wyndham Worldwide - WYN - close: 72.49

Comments:
01/05/14: WYN tagged new all-time highs on the last day of the year. Since then WYN has started to see some profit taking. If this pullback continues we could see WYN retesting support near $70.00 again. I am not suggesting new positions at this time.

Earlier Comments:
The point & figure chart is bullish and currently forecasting a $93.00 target.

- Suggested Positions -
NOV 18, 2013 - entry price on WYN @ 68.97, option @ 4.20
symbol: WYN1517a75 2015 JAN $75 call - current bid/ask $ 5.20/5.90

12/22/13 new stop loss @ 67.40
12/01/13 new stop loss @ 65.40
11/24/13 new stop loss @ 64.75
11/18/13 trade opens. WYN opens @ 68.97

Current Target: 85.00
Current Stop loss: 67.40
Play Entered on: 11/18/13
Originally listed on the Watch List: 11/10/13



CLOSED Plays


NVIDIA Corp. - NVDA - close: 15.67

Comments:
01/05/14: NVDA posted a nine-cent decline for the week. We had decided last weekend to close this trade due to NVDA's volatility and lack of progress. The stock opened at $15.77 on Monday, December 30th (virtually unchanged).

- Suggested *Small* Positions -
SEP 12, 2013 - entry price on NVDA @ 15.63, option @ 0.88
symbol: NVDA1418a16 2014 JAN $16 call - exit $0.23 (-73.8%)

- or -

SEP 12, 2013 - entry price on NVDA @ 15.63, option @ 1.54
symbol: NVDA1517a17 2015 JAN $17 call - exit $1.26*(-18.1%)

12/30/13 planned exit
*option exit price is an estimate since the option did not trade at the time our play was closed.
12/29/13 prepare to exit on Monday, Dec. 30th at the open
09/22/13 new stop loss @ 14.45

Chart of NVDA:

Current Target: exit for 2014 calls is $18.00, exit for 2015s is $19.75
Current Stop loss: 14.45
Play Entered on: 09/12/13
Originally listed on the Watch List: 08/18/13



Watch

Networking and Coffee

by James Brown

Click here to email James Brown

Editor's Note:

I am removing SWN as an active watch list candidate and we've adjusted a couple of entry points for C and CBI.



New Watch List Entries

JNPR - Juniper Networks

SBUX - Starbucks


Active Watch List Candidates

C - Citigroup, Inc.

CBI - Chicago Bridge & Iron

FL - Foot Locker, Inc.

ITW - Illinois Tool Works

STX - Seagate Tech.


Dropped Watch List Entries

We are removing SWN as a candidate tonight.



New Watch List Candidates:


Juniper Networks - JNPR - close: 22.77

Company Info

JNPR is in the technology sector. The company is a major player in the computer networking equipment and solutions industry. The stock appears to have put in a significant bottom back in October. Given the rally in JNPR investors do not seem worried that JNPR sales overseas are going to suffer from the NSA scandal that has plagued so many big tech American firms or it's possible this has been priced in.

JNPR's stock is currently testing significant resistance near $23.00 a breakout here would be bullish. The Point & Figure chart is bullish and forecasting at $29 target that could rise.

I am still worried that the market is overbought and due for a dip so more conservative investors may want to shy away from a breakout trade like this one. Plus JNPR is due to report earnings in late January but the actual date has not been confirmed yet. Investors may want to consider waiting until after JNPR reports earnings and we see how the stock fares following its results before initiating positions.

Tonight I am suggesting we wait for JNPR to close above $23.25. If this happens we can launch positions the next morning with a stop loss at $19.95. Our long-term target is the $28-30 zone.

Breakout trigger: Wait for JNPR to close above $23.25,
then buy calls the next day with a stop at $19.95

BUY the 2015 Jan $25 call (JNPR1517a25) current ask $2.49

- or -

BUY the 2016 Jan $25 call (JNPR1615a25) current ask $3.90

Chart of JNPR:

Originally listed on the Watch List: 01/05/14


Starbucks - SBUX - close: 76.95

Company Info

SBUX is currently an active LEAPStrader play but tonight I am suggesting an immediate exit. The recent action in the stock has turned bearish. I suspect that SBUX is due for a deeper correction lower. The $70.00 level and the simple 200-dma (near $70) should offer support. I am probably a bit early adding SBUX to the watch list but we're listing a buy-the-dip trigger to buy calls at $70.50 with a stop loss at $67.00.

Earnings are expected in late January but no date has been confirmed yet.

Buy-the-Dip trigger: $70.50

BUY the 2015 Jan $75 call (SBUX1517a75)

- or -

BUY the 2016 Jan $80 call (SBUX1615a80)

Chart of SBUX:

Originally listed on the Watch List: 01/05/14


Active Watch List Candidates:



Citigroup Inc. - C - close: 53.40

Comments:
01/05/14: Many of the big banking stocks have been showing relative strength. Citigroup surged on Friday with a +2.1% gain. The overall pattern for C remains bullish but I am worried the market is overbought and due for a dip. Thus I am adjusting our entry trigger on C. We'll raise it to $54.00. Wait for C to close above $54.00 and then buy calls the next day. More conservative investors may want to just wait until after C reports earnings on January 16th and watch how the market reacts to this news before considering new positions.

Earlier Comments:
Our long-term target is the $70.00 area.

Breakout trigger: Wait for C to close above $54.00
buy calls the next morning with a stop loss at $47.90

BUY the 2015 Jan $60 call (C1517a60)

- or -

BUY the 2016 Jan $60 call (C1615a60)

01/05/14 adjust the trigger to $54.00
12/08/13 if triggered start with a stop loss at $47.90
12/01/13 adjust the entry trigger: wait for a close above $53.60 instead of a close above $53.50

Originally listed on the Watch List: 11/24/13


Chicago Bridge & Iron - CBI - close: 81.23

Comments:
01/05/14: My concerns about the market possibly near a pullback will adjust our entry point strategy on CBI too. We'll move our buy-the-dip trigger from $80.25 down to $78.25. I'll adjust the stop loss to $74.45.

Earlier Comments:
Our long-term target is $98.50.

Buy-the-Dip trigger: $78.25

BUY the 2015 Jan $90 call (CBI1517a90)

01/05/14 adjust the buy-the-dip trigger to $78.25, from $80.25
adjust the stop loss to $74.45 from $74.75.

Originally listed on the Watch List: 12/22/13


Foot Locker, Inc. - FL - close: 41.25

Comments:
01/05/14: FL displayed some relative strength on Friday but the stock has spent the last two weeks churning sideways in the $40.50-41.50 zone. I don't see any changes from my prior comments. We are waiting for a correction.

I am suggesting a buy-the-dip entry point at $39.25. If triggered we'll use a stop loss at $36.75. Our target is $48.00. More aggressive traders could aim higher since the point & figure chart is forecasting a $60 target.

Buy-the-Dip trigger: $39.25

BUY the 2015 Jan $40 call (FL1517a40)

Originally listed on the Watch List: 12/29/13


Illinois Tool Works Inc. - ITW - close: 83.74

Comments:
01/05/14: I do not see any changes from last week's new watch list candidate description. When the market eventually dips, and it will, we want to be ready to buy a dip in ITW. Broken resistance near $80.00 should be support.

I am suggesting a buy-the-dip trigger at $80.25. If triggered we'll start with a stop loss at $76.85. Our long-term target is $95.00.

Buy-the-Dip trigger: $80.25

BUY the 2015 Jan $85 call (ITW1517a85)

Originally listed on the Watch List: 12/29/13


Seagate Technology - STX - close: 56.82

Comments:
01/05/14: STX displayed relative strength on Friday with a strong bounce from its 10-dma. We still don't want to chase it at current levels. I will adjust our buy-the-dip trigger from $51.00 to $52.00.

If triggered we'll use a stop loss at $46.75. Our long-term target is $65. More aggressive investors could aim higher. The point & figure chart is predicting a $77 target.

Buy-the-Dip trigger: $52.00

BUY the 2015 Jan $55 call (STX1517a55)

01/05/14 adjust the buy-the-dip trigger from $51.00 to $52.00

Originally listed on the Watch List: 12/29/13


Southwestern Energy Co. - SWN - close: 38.75

Comments:
01/05/14: SWN continues to retreat from its late December highs and resistance near $40.00. This weakness is discouraging with the stock down four days in a row. I am removing SWN as a watch list candidate. It seems unlikely that shares will breakout any time soon.

Trade did not open.

01/05/14 removed from the watch list. Trade did not open. Suggested entry point was a close over $40.50

Originally listed on the Watch List: 12/22/13