We're doubling the size of our watch list and focusing on earnings results this week.
New Watch List Entries
Intl. Game Technology
Reynolds American Inc.
Walter Energy Inc.
Active Watch List Candidates
BEAV - BE Aerospace Inc.
CELG - Celgene Corp
MICC - Millicom Intl. Cellular
Dropped Watch List Entries
None. We did not drop any watch list candidates.
New Watch List Candidates:
IGT $17.68 +0.55 --- Intl. Game Technology
It you look at a long-term chart of IGT you can see that shares put in a very significant bottom with the November 2008 and March 2009 lows. In the last few months the stock has broken through resistance near $14.00 and just retested it two weeks ago. The new trend is up. Yet short-term IGT looks overbought. I suspect that might change this week. The company reports earnings on July 23rd before the market's opening bell. Wall Street's estimates are at 18-cents a share. After such a big run up in IGT from the July low the stock should see some profit taking. We want to buy LEAPS on a dip near $15.00. Our long-term target is the $25.00-30.00 zone.
NOTE: Readers may want to wait until after IGT reports earnings no matter what even if the stock hits our trigger before the report.
There's always a chance that company disappoints badly and shares gap lower.
International Game Technology (www.IGT.com) is a global company specializing in the design, development, manufacturing, distribution and sales of computerized gaming machines and systems products.
(source: company press release or website)
Buy-the-Dip trigger: $15.25
BUY the 2010 January $17.50 call (IGT-AW) -or-
BUY the 2010 January $20.00 call (IGT-AD) -or-
BUY the 2011 January $20.00 call (VGG-AD)
Chart of IGT:
RAI $41.01 +0.65 -- Reynolds American Inc.
RAI is also forming a significant bottom. Last week the stock broke out over resistance near $40.00 and its 200-dma. Shares look poised to breakout over stronger resistance at $42.00 and really launch into a new leg higher. However, earnings are due out on July 23rd before the market opens. Wall Street expects a profit of $1.16 a share.
I am listing two different entry points to buy LEAPS on RAI. One is a breakout entry point at $42.50. The other is a buy the dip entry point at $38.00. Currently the Point & Figure chart is bullish with a $62 target.
NOTE: Readers may want to wait until after RAI reports earnings no matter what even if the stock hits our trigger before the report. There's always a chance that company disappoints badly and shares gap lower.
Reynolds American Inc. (NYSE: RAI) is the parent company of R.J. Reynolds Tobacco Company, Conwood Company, LLC. and Santa Fe Natural Tobacco Company, Inc. (source: company press release or website)
Buy-the-Dip trigger: $38.00 - or -
The Breakout trigger: $42.50
BUY the 2010 FEBRUARY $45.00 call (RAI-BI) -or-
BUY the 2011 JANUARY $40.00 call (OWO-AH)
Chart of RAI:
WLT $43.00 +1.36 -- Walter Energy Inc.
The relative strength in shares of WLT, a coal company, makes the stock look like a buy right now. The company produces a lot of metallurgical coal that's crucial for smelting, which could be the cause for the stock's out performance compared to the rest of the sector. However, instead of buying the breakout I think we should wait. The company is due to report earnings on July 22nd, after the market's closing bell. Analysts are expecting a loss of 4-cents a share. There's always the chance that the stock sells-off on the earnings news.
I'm suggesting readers buy LEAPS on a dip in the $36.00-35.00 zone. If WLT doesn't sell-off post earnings we'll re-evaluate. Our long-term target is $60.00.
NOTE: Readers may want to wait until after WLT reports earnings no matter what even if the stock hits our trigger before the report. There's always a chance that company disappoints badly and shares gap lower.
Walter Energy, based in Tampa, Fla., is a leading producer and exporter of premium U.S. metallurgical coal for the global steel industry and also produces steam coal and industrial coal, metallurgical coke and coal bed methane gas. The Company has revenues of approximately $1.2 billion and currently employs approximately 2,150 people. (source: company press release or website)
Buy-the-Dip trigger: $36.00
BUY the 2010 January 50.00 call (WLT-AJ)
BUY the 2011 January 50.00 call (OZE-AJ)
Chart of xxx:
Active Watch List Candidates:
BEAV $14.26 +0.07 -- BE Aerospace Inc.
That $12.50 entry point we used to have on BEAV is looking pretty good right about now. Yet a week ago the stock market looked poised to begin a new leg lower. No one was expecting a massive short squeeze to lift the S&P 500 up 7% in five days. BEAV has rallied toward resistance near $14.00 and its 50-dma and exponential 200-dma. We're not going to launch positions here. I would be tempted to buy LEAPS on another dip near $12.00 but for now we'll leave the trigger at $10.50. Another week should provide a lot more clarity.
Buy-the-Dip trigger: $10.50
BUY the 2010 January $15.00 calls (symbol: BQV-AC)
Note: At $10.50 you could just buy the stock instead but the $15 calls will allow you more leverage on your investment.
Chart of BEAV:
CELG $46.83 -0.21 -- Celgene Corp.
This could be the week we get triggered. CELG is due to report earnings on July 23rd before the opening bell. The stock could see some profit taking on its earnings report. The $43.00 level lines up well with the 50% retracement of its March-June rally. We'll use a stop loss at $39.00. Our target is $59.50.
Buy-the-Dip trigger: $43.00
BUY the 2010 January $50 call (symbol: LQH-AJ)
Chart of CELG:
MICC $60.77 +0.15 -- Millicom Intl. Cellular
The market's short-squeeze helped produce a breakout over resistance at $58.00 in MICC. The company is due to report earnings on July 21st before the opening bell. Shares could see some volatility this week. Our entry point at $50.50 may be too optimistic. We'll re-evaluate after we see how investors react to earnings.
We'll use a stop loss at $44.80. Our target is the $75-80 zone.
Buy-the-Dip trigger: $50.50
BUY the 2010 January $60 call (symbol: CQD-AL)
Chart of MICC: