New Watch List Entries

ESV - ENSCO Intl. Inc.,

MTL - MECHEL OAO

MTW - Manitowoc Inc.

SPW - SPX Corp.


Active Watch List Candidates

BEAV - BE Aerospace Inc.

BG - Bunge Limited

COST - Costco Wholesale

ERJ - EMBRAER - Empresa Brasileira de Aeronáutica

IGT - Intl. Game Technology

MEE - Massey Energy Corp.

X - United States Steel Corp.


Dropped Watch List Entries

EMR - hit our trigger and graduated to the play list.

TEX - hit our trigger and graduated to the play list.

MICC - I'm dropping it from the watch list.


New Watch List Candidates:

ESV $40.89 +1.39 -- ENSCO Intl. Inc.

ESV is another oil services stock. Shares have been showing a lot of relative strength and broke out from a triangle-shaped consolidation. Now the stock looks short-term overbought given the six-day bounce. We want to buy LEAPS on a dip at $38.00. We'll use a tight stop loss at $34.90. The Point & Figure chart is bullish with a $55.00 target. We're going to aim for the $55-60 zone.

Company Info:
Ensco International (NYSE: ESV) brings energy to the world as a global provider of offshore drilling services to the petroleum industry. Our fleet of 8 ultra-deepwater semisubmersible rigs (including five under construction) and 42 premium jackup rigs are strategically located in the most prolific worldwide oil and gas markets and are managed through four major business units: Deepwater, Asia & Pacific Rim, Europe & Africa and North & South America. More than 3,500 Ensco employees work around the clock for our customers. (source: company press release or website)

Buy-the-Dip trigger: $38.00

BUY the 2011 January $40 call (VKS-AH)
(More aggressive traders may want to trade January 2010 or March 2010 calls instead)

Chart of ESV:


MTL $15.35 +1.28 -- MECHEL OAO

A number of the metal and mining stocks just took off this past week. MTL, a Russian company, is one of them that is hitting new 2009 highs. The stock appears to have built a significant bottom over the last several months. I am suggesting we buy MTL the stock or LEAPS on a dip at $13.25. We'll use a stop loss at $9.75. The Point & Figure chart is bullish with a $27 target. Our long-term target is also $27.00.

Company Info:
Mechel is one of Russia’s leading mining and metals companies, uniting producers of coal, iron ore, nickel, steel, rolled products, and hardware. (source: company press release or website)

Buy-the-Dip trigger: $13.25

BUY the 2010 April $15.00 calls (symbol: MTL-DC)

or BUY the STOCK @ 13.25

Chart of MTL:


MTW $8.81 +0.35 -- Manitowoc Inc.

If the global economy is truly on the verge of recovery then business should be picking up for both of MTW's segments. At least that's what the recent rally might suggest. The stock has built a significant bottom over the last several months. Short-term shares are overbought and due for a dip. I'm suggesting investors buy the stock or LEAPS options on a dip at $7.75. Currently the Point & Figure chart is bullish with an $18.50 target. I'm setting our long-term target at $17.00.

Company Info:
Manitowoc was founded in the lakeshore community of Manitowoc, Wisconsin, in 1902 as a shipbuilding and ship-repair organization. Since that time, the company has grown and diversified, entering the lattice-boom crane business in the mid-1920’s and branching into commercial refrigeration equipment shortly after World War II. Today, the company is comprised of two segments – cranes and foodservice equipment. In each of these segments Manitowoc is the industry leader in market share, product innovation, and product support services. (source: company press release or website)

Buy-the-Dip trigger: $7.75

BUY the 2011 January $7.50 calls (symbol: VMT-AU)

or BUY the STOCK at $7.75.

Chart of MTW:


SPW $63.52 +2.07 -- SPX Corp.

Last week the multi-industry companies were upgraded with the expectation that these stocks would out perform the rest of the market when manufacturing finally turns positive. Shares of SPW really took off last week hitting new highs for 2009. The trend is up but we don't want to chase it here. I'm suggesting we buy LEAPS on a dip at $58.50. The Point & Figure chart is bullish with a target at $70. If triggered our long-term target is the $79.00 mark.

Company Info:
Founded as an automotive components supplier, SPX Corporation today is a global, Fortune 500, multi-industry company. We provide products and services for multiple industries — food and beverage, transportation, automotive, power generation and distribution, gas and oil production, manufacturing, pharmaceutical and biotechnology, agriculture and others. (source: company press release or website)

Buy-the-Dip trigger: $58.50

BUY the 2010 March $60 calls (symbol: SPW-CL)

Chart of SPW:


Active Watch List Candidates:


BEAV $19.19 +0.39 -- BE Aerospace Inc.

BEAV is hitting new highs for 2009. More aggressive traders may want to consider positions here. I'm still a little cautious with the stock building a bearish megaphone-shaped pattern. I will up our trigger to $16.00 and our stop loss to $13.40.

Buy-the-Dip trigger: $16.00

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 $65.62 -0.99 -- Bunge Limited

Bullish investors should be somewhat concerned that BG has not participated with the market's rally this past week. I'm turning more cautious here. We want to open smaller positions about 1/2 your normal trade. I'm also raising our stop loss to $57.49. Our trigger remains at $63.00. If you prefer to buy a breakout then look for a move over the red trendline of a move over $70.00. 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 APRIL 70 calls (BGW-DN) *NEW OPTION*

Chart of BG:


COST $56.81 -0.10 -- Costco Wholesale

The momentum in COST has come to a dead stop. Shares have been trading sideways for four days in a row with a narrow 75-cent range. Our plan is to buy LEAPS on a dip at $51.50. If triggered we'll use a stop loss at $47.00. Our target is the $65.00 region.

Buy-the-Dip trigger: $51.50

BUY the 2010 January $50 calls (symbol: PRQ-AJ)

Chart of COST:


ERJ $23.69 -0.08 -- EMBRAER - Empresa Brasileira de Aeronáutica S.A.

ERJ displayed some relative strength last week and shares are close to testing resistance near $24.00 again. We don't want to chase this move but $19.00 seems too low. I'm bumping the trigger back to $20.50. Currently I'm watching the 50-dma, 100-dma and exponential 200-dma as probable support on any correction. Stop loss at $17.75. Our target is the $29-30 zone. FYI: The P&F chart is bullish with a $42 target.

Buy-the-Dip trigger: $20.50

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

Chart of ERJ:


IGT $22.63 +0.06 --- Intl. Game Technology

Gambling-related stocks have been strong. Some of the casino stocks have really stolen the spotlight but IGT is also hitting new highs. The 50-dma, near $19.00, is also near the bottom of IGT's bullish channel. Our trigger is at $19.00 with a stop loss at $16.75. 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

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

Chart of IGT:


MEE $29.99 +0.01 -- Massey Energy Corp.

The coal stocks have been showing relative strength. Yet MEE's rally stalled at its August highs. A 50% retracement of the July-August rally would be near $23.60. I'm raising our trigger to buy LEAPS on MEE to $25.00 but I'm keeping the stop at $19.95. More conservative traders may want to use a stop near $21.75 instead. Our long-term target is the $40.00. Readers may want to consider the 2011 January calls instead.

Buy-the-Dip trigger: $25.00 *new*

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

Chart of MEE:


MICC $76.24 +0.79 -- Millicom Intl. Cellular

Short-term traders may want to re-evaluate MICC. I'm dropping it as a long-term candidate. That doesn't the stock won't hit new highs but I don't see an attractive entry point to buy LEAPS.


X $45.86 +0.11 United States Steel Corp.

Steel and metal stocks have been showing a lot of relative strength. Unfortunately X has failed to hit new relative highs like so many peers. I'm raising our trigger to buy LEAPS from $37.50 to $40.25. We'll put the stop loss just under the 100-dma at $36.49. Our target is the $60-70 zone.

Buy-the-Dip trigger: $40.25

BUY the 2010 January $45 calls (symbol: FBJ-AI)

Chart of X: