New Watch List Entries

BJS - BJ Services Company

CRS - Carpenter Technology Corp.


Active Watch List Candidates

BEAV - BE Aerospace Inc.

BG - Bunge Limited

CLF - Cliffs Natural Resources Inc.,

CNX - Consol Energy Inc.

ERJ - EMBRAER - Empresa Brasileira de Aeronáutica

IGT - Intl. Game Technology

MEE - Massey Energy Corp.

MICC - Millicom Intl. Cellular

TEX - Terex Corp

WLT - Walter Energy Inc.

X - United States Steel Corp.

XIDE - Exide Technologies


Dropped Watch List Entries

ANR was promoted to the play list this weekend.


New Watch List Candidates:

BJS $15.43 +0.01 -- BJ Services Company

BJS is an oil services stock that appears to be breaking out from a multi-week consolidation in the $13.50-15.00 zone. I'm tempted to buy LEAPS now but as you can see on the chart below BJS has a larger, triangle pattern building. I'm suggesting two different triggers to open LEAPS positions. We can buy a dip near $14.00 with a stop loss at $11.95 or we can buy a breakout at $17.10 with a stop loss at $13.95. More aggressive traders could get an early jump on the breakout with a move over $16.00 instead. Our long-term target is the $25.00 region.

Company Info:
BJ Services has earned a reputation for providing reliable fracturing services for virtually every major shale oil and gas operator. Since 1981, our skilled engineers and crews have successfully designed and pumped more than 12,000 shale frac stages around the world. We know that every shale formation is different and we offer the most advanced fracturing technologies–the right fluids, proppants and equipment–needed to “crack the code” for optimum frac designs and operations. (source: company press release or website)

Buy-the-Dip trigger: $14.00

or

Breakout trigger: $17.10

BUY the 2010 January $15.00 LEAP (symbol: BJS-AC)

Chart of BJS:


CRS $21.75 +0.48 -- Carpenter Technology Corp.

CRS is a specialty metals stock that appears to be breaking out from a multi-week consolidation, which tested its trendline of higher lows (support). The rally stalled at its 200-dma but I think it's temporary. If you review a weekly chart CRS appears to be forming a significant bottom. I'm suggesting we buy LEAPS on a dip back toward support near $20.00. We'll use a trigger at $20.50 and a stop loss at $17.50. Our long-term target is the $35-40 zone.

Company Info:
Carpenter (NYSE:CRS) is a leader in the development, manufacture and distribution of cast/wrought and powder metal stainless steels and specialty alloys including high temperature (iron-nickel-cobalt base) alloys, controlled expansion alloys, ultra high strength alloys, implantable alloys, tool and die steels and other specialty metals, as well as cast/wrought titanium alloys. (source: company press release or website)

Buy-the-Dip trigger: $20.50

BUY the 2010 March calls (symbol: CRS-CD)

Chart of CRS:


Active Watch List Candidates:


BEAV $18.19 -0.01 -- BE Aerospace Inc.

BEAV managed to hit new 2009 highs on Friday. The stock's trend of higher lows is still in place but momentum is slowing. The plan is to buy long-term LEAPS positions on a dip at $15.00. More aggressive traders may want to consider jumping in early near $16.00. If triggered our stop is at $11.90.

Buy-the-Dip trigger: $15.00

BUY the 2010 January $15.00 calls (symbol: BQV-AC)
or
BUY the stock at $15.00

Note: At $15.00 you could just buy the stock instead but the $15 calls will allow you more leverage on your investment.

Chart of BEAV:


BG $68.75 +0.16 -- Bunge Limited

We raised our trigger to $63.00 last week but BG has continued to stay just beyond our reach. The stock is nearing potential resistance at $70.00 and the top of its gap down. I'm not going to give up here. Keep the trigger at $63.00. We'll use a stop loss at $54.75. More conservative traders can still wait for a dip closer to $60.00 and a stop loss closer to $59.00. If triggered we're going to aim for the $85-90 zone. Currently the Point & Figure chart is bullish with a $94 target.

Buy-the-Dip trigger: $63.00

BUY the 2010 January 70 calls (BGW-AN)

Chart of BG:


CLF $26.42 +0.31 -- Cliffs Natural Resources Inc.

CLF is starting to roll over. Shares do have some support near $25.00 and its 100-dma but we're looking to buy LEAPS on a dip at $23.50 near the 200-dma and its longer-term trend of higher lows (see chart). We also have a breakout trigger should CLF unexpectedly rally. If triggered our long-term target is the $50.00-55.00 zone. We'll use a stop loss at $19.40 for the dip entry point and a stop at $24.50 for the breakout entry point.

Buy-the-Dip trigger: $23.50

Breakout trigger: $32.55 BUY the 2010 January $25.00 call (CLF-AE) *updated strike*

Chart of CLF:


CNX $38.83 +0.35 -- Consol Energy Inc.

It looks like CNX has started to correct. There is a good chance the stock will dip toward the $35.00 level. We're going to jump in a little early at $36.50. We'll use a stop loss at $29.99 but more conservative traders might want to consider a stop near $32.50 instead. If triggered we want to sell half at $48.50 and half at $57.50.

Buy-the-Dip trigger: $36.50

BUY the 2010 January 35.00 calls (symbol: CNX-AG)
or
BUY the 2011 January 40.00 calls (symbol: VTL-AH)

Chart of CNX:


ERJ $21.80 -0.60 -- EMBRAER - Empresa Brasileira de Aeronáutica S.A.

We are still waiting for a correction in ERJ. More conservative traders may want to wait for a dip into the $19.00-18.00 zone with the 50-dma. We have a slightly more aggressive entry at $20.50. Our target is the $29-30 zone. I'm suggesting a stop loss at $16.45.

Buy-the-Dip trigger: $20.50

BUY the 2010 January $20.00 call (symbol: ERJ-AD)

Chart of ERJ:


IGT $21.08 -0.15 --- Intl. Game Technology

There is no change from my previous update on IGT. We're still waiting for a dip toward the bottom of its bullish channel. I am inching up the stop loss to $15.95. We only want to open small positions at least 1/2 our normal trade size. Our long-term targets are $25.00 (sell half) and $29.00 (sell half).

Buy-the-Dip trigger: $19.00 (19.00-17.50 zone)

BUY the 2010 January $20.00 call (IGT-AD) -or- BUY the 2011 January $20.00 call (VGG-AD)

Chart of IGT:


MEE $28.43 +0.53 -- Massey Energy Corp.

It looks like MEE has finally started to correct. A 38.2% Fibonacci retracement of its July-August rally would be $25.00. I am adjusting our trigger to buy LEAPS to $25.25. I'm raising the stop loss to $19.95. Our long-term target is the $35.00-40.00 range. The P&F chart agrees and points to a $37.50 target.

Buy-the-Dip trigger: $25.25 *new*

BUY the 2010 January $25.00 call (MEE-AE)

Chart of MEE:


MICC $70.91 -1.51 -- Millicom Intl. Cellular

MICC is slowly consolidating. We're still waiting for a more significant correction. Currently the plan is to buy a correction back toward $62.50. More aggressive traders might want to raise that trigger. Buy-the-Dip trigger: $62.50

BUY the 2010 January $70 call (symbol: CQD-AN)

Chart of MICC:


TEX $16.70 +1.12 -- Terex Corp.

TEX spent the week consolidating sideways. We have two different triggers to catch TEX on a breakout or on a dip. I'm suggesting a stop loss at $11.75 for the dip entry point and a stop loss at 13.90 for the breakout entry point. Our upside target is the $28.00-30.00 zone.

Buy-the-Dip trigger: $15.00

-or-

Breakout trigger: $18.25

BUY the 2010 JAN $15.00 Calls (symbol: HAG-AC)
-or-
BUY the 2011 JAN $20.00 Calls (symbol: VXQ-AD)

Chart of TEX:


WLT $54.80 -0.44 -- Walter Energy Inc.

After an astonishing run WLT has started to correct. The stock is already off more than 12% from its recent highs. The rally has been so strong that we need to be patient on the pull back. I am upping our trigger to buy LEAPS from $41.00 to $46.00, which would be a 30% pull back off its highs. We'll use a stop loss at $38.50.

Buy-the-Dip trigger: $46.00 *new*

BUY the 2010 January 50.00 call (WLT-AJ)

-or-

BUY the 2011 January 50.00 call (OZE-AJ)

Chart of WLT:


X $44.60 +1.16 United States Steel Corp.

We might want to buy dips near $40.00 and its rising 50-dma instead of waiting for a deeper correction. I'm leaving the trigger at $37.50 for now but keep an eye on X for a bounce from $40 this week. I'm raising our stop loss to $33.75. Our target is the $60-70 zone.

Buy-the-Dip trigger: $37.50

BUY the 2010 January $40 calls (symbol: FBJ-AH)

Chart of X:


XIDE $7.32 -0.11 Exide Technologies

XIDE held up pretty well considering how strong the rally was two weeks ago. I still expect the stock to fill the gap. The plan is to buy calls on a dip at $6.50. We'll use a stop loss at $4.85. Our target is $12.00.

Buy-the-Dip trigger: $6.50

BUY the 2010 March $7.50 Calls (symbol: FRU-CU)
-or-
Our alternative strategy is to buy the stock at $6.50

Chart of XIDE: