New Watch List Entries
CHK - Chesapeake Energy Corp.
TXT - Textron Inc.
Active Watch List Candidates
BEAV - BE Aerospace Inc.
Cost - Costco Wholesale
ERJ - EMBRAER - Empresa Brasileira de AeronÃ¡utica
ESV - ENSCO Intl. Inc.,
FWLT - Foster Wheeler
IGT - Intl. Game Technology
MEE - Massey Energy Corp.
MTL - MECHEL OAO
MTW - Manitowoc Inc.
SPW - SPX Corp.
X - United States Steel Corp.
Dropped Watch List Entries
None. We did not drop any candidates.
New Watch List Candidates:
CHK $27.53 -0.29 -- Chesapeake Energy Corp.
CHK is a natural gas company and its stock has been doing surprisingly well considering the multi-year lows for natural gas. CHK hit new 2009 highs last week but has begun to correct with the rest of the energy sector. With natural gas likely forming significant lows when the commodity finally turns around it could certainly fuel a significant rally for CHK. Right now CHK is still overbought. I am suggesting investors buy LEAPS on a dip at $23.50. We'll use a stop loss at $19.90. Our long-term target is $40.00.
Weâ€™re one of the largest producers of natural gas in the nation and the most active driller of new wells in the U.S. Headquartered in Oklahoma City, our strategy is focused on discovering, acquiring and developing conventional and unconventional natural gas reserves onshore in the U.S., primarily in the "Big 4" natural gas shale plays: the Barnett Shale of north-central Texas, the Haynesville Shale of East Texas and northwestern Louisiana, the Fayetteville Shale of central Arkansas and the Marcellus Shale of the northern Appalachian Basin.
(source: company press release or website)
Buy-the-Dip trigger: $23.50
BUY the 2011 January $25 calls (symbol: VEC-AE)
Chart of CHK:
TXT $17.88 -0.46 -- Textron Inc.
TXT is one of the multi-industry conglomerates that analysts were so bullish about a few weeks ago. As the manufacturing activity picks up with the economic recovery shares of TXT are expected to out perform. It looks like they've already been out performing with a massive rally for the third quarter. We don't want to chase it here. Broken resistance near $15.00 should offer some support. I'm suggesting investors buy LEAPS on a dip at $15.25. We'll use a stop loss at $11.75 near the simple 200-dma. Our long-term target is the $30 region.
Textron Inc. (NYSE: TXT) is not only one of the world's best known multi-industry companies, it is a pioneer of the diversified business model. Founded in 1923, we have grown into a network of businesses with total revenues of $14.2 billion, and approximately 37,000 employees with facilities and presence in 29 countries, serving a diverse and global customer base. Headquartered in Providence, Rhode Island, U.S.A.,Textron is ranked 173rd on the FORTUNE 500 list of largest U.S. companies. Organizationally, Textron consists of numerous subsidiaries and operating divisions, which are responsible for the day-to-day operation of their businesses
(source: company press release or website)
Buy-the-Dip trigger: $15.25
BUY the 2011 January 15.00 call (symbol: XUD-AC)
Chart of TXT:
Active Watch List Candidates:
BEAV $19.06 -0.51 -- BE Aerospace Inc.
BEAV surged to new 2009 highs near $21.00 last week. Our trigger at $16.00 looks like a long-way down but if the market really starts to correct this stock can move fast.
More aggressive traders may want to consider buying a dip near $18.00. If triggered at $16.00 we'll use a stop loss at $13.40.
Buy-the-Dip trigger: $16.00
BUY the 2010 January $15.00 calls (symbol: BQV-AC)
BUY the stock at $16.00
Note: At $16.00 you could just buy the stock instead but the $15 calls will allow you more leverage on your investment.
Chart of BEAV:
COST $56.28 -1.15 -- Costco Wholesale
COST has begun to correct after hitting new highs around $58.80 last week. That big gap higher in early September is an air pocket just begging to get filled. A complete pull back toward $50 may not happen until after COST reports earnings on October 7th, 2009 (before the market's opening bell).
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 $23.35 -0.61 -- EMBRAER - Empresa Brasileira de AeronÃ¡utica S.A.
The action in ERJ last week looks like a bearish reversal. Odds are growing that ERJ will correct back toward round-number support at $20.00. If triggered at $20.50 we'll use a 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:
ESV $41.25 -0.27 -- ENSCO Intl. Inc.
The rally in ESV stalled again near $43.00. Our plan has not changed. We want to buy LEAPS on a dip at $38.00.
We'll use a 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.
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:
FWLT $31.14 -1.09 -- Foster Wheeler AG
Right on cue FWLT is correcting and sharply too! The 50-dma near $28.50 and the exponential 200-dma near $28.00 should offer some technical support. The plan is to buy LEAPS on a dip at $29.00. We'll use a stop loss at $25.95.
More aggressive traders may want to use a wider stop and may want to jump in at $31.00. Our bullish target is the $45-50 zone.
Buy-the-Dip trigger: $29.00
BUY the 2011 January $30.00 calls (symbol: ZHF-AF)
Chart of FWLT:
IGT $20.86 -0.14 --- Intl. Game Technology
IGT has been correcting for two weeks now. Shares are inching closer to our trigger at $19.50.
If triggered we'll use a stop loss at $17.40. 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).
FYI: There was a huge amount of volume on the 2011 $20 CALL LEAPS on Friday.
Buy-the-Dip trigger: $19.50
BUY the 2011 January $20.00 call (VGG-AD)
Chart of IGT:
MEE $28.05 -1.13 -- Massey Energy Corp.
The correction in MEE has been pretty sharp this past week. The stock is now testing its 50-dma near $27.50. Our trigger to buy LEAPS is at $25.00. If triggered our stop loss is at $19.95.
NOTE: I would only open half a position at this time. If conditions warrant we can add to it later.
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
BUY the 2010 January $25.00 call (MEE-AE)
Chart of MEE:
MTL $17.16 +0.14 -- MECHEL OAO
MTL soared to new 2009 highs last week. This stock can move fast and when it corrects it can drop even faster.
The plan is to buy LEAPS or the stock 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.
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 $9.52 -0.20 -- Manitowoc Inc.
Shares of MTW appear to have formed a bearish double top in the last two weeks. That would suggest the next move is down. Currently our plan is to buy LEAPS or the stock at $8.00. The Point & Figure chart is bullish and the upside target is $23. I'm setting our long-term target at $17.00.
Buy-the-Dip trigger: $8.00
BUY the 2011 January $7.50 calls (symbol: VMT-AU)
or BUY the STOCK at $8.00
Chart of MTW:
SPW $61.45 -1.75 -- SPX Corp.
SPW just spent two weeks churning sideways but on Friday it began to breakdown. Odds are growing fast that we'll be triggered soon at $58.50. More conservative traders can wait for a dip closer to the $56.00-55.00 zone.
The Point & Figure chart is bullish with a target at $70. If triggered our long-term target is the $79.00 mark.
Buy-the-Dip trigger: $58.50
BUY the 2010 March $60 calls (symbol: SPW-CL)
Chart of SPW:
X $46.63 -1.33 United States Steel Corp.
X spiked to a new high at $51.65 and reversed. The steel stocks have been volatile this year and I'm counting on that volatility to continue. There is potential support at $45.00 but I'm setting our trigger to buy LEAPS at $41.00. Our stop loss is at $37.40. Our target is the $60-70 zone.
Buy-the-Dip trigger: $41.00
BUY the 2010 January $45 calls (symbol: FBJ-AI)
Chart of X: