New Watch List Entries
BQI - Oilsands Quest, Inc.
Active Watch List Candidates
AVY - Avery Dennison
BUCY - Bucyrus Intl.
CHK - Chesapeake Energy Corp.
CR - Crane Co.
ESV - ENSCO Intl. Inc.,
GHM - Graham Corp.
MTW - Manitowoc Inc.
PCX - Patriot Coal Corp.
TRN - Trinity Industries
TXT - Textron Inc.
Dropped Watch List Entries
We're dropping BUCY.
New Watch List Candidates:
BQI $1.50 -0.02 -- Oilsands Quest Inc.
The sharp rally in crude oil has fueled a rally in non-traditional sources like the oil sands. The stock has built a significant base or bottom over the last several months and shares appear to be breaking out. Yet at the moment both oil and BQI look short-term overbought and due for some profit taking.
While I would be tempted to start buying the stock around $1.25 I'm actually setting our trigger to open bullish positions at $1.15. We'll use a stop loss at $0.90. Please use wise judgment when it comes to your position size. Don't over do it just because the stock is "cheap".
I'm setting our first target at $2.90.
Oilsands Quest Inc. is a public company (Amex: BQI) engaged in a variety of projects in the oil and gas industry in Western Canada with an emphasis on the oil sands. The company is aggressively exploring Canada's largest contiguous oil sands land holding, which is located in northeast Alberta and northwest Saskatchewan. Oilsands Quest is leading the development of an oil sands industry in the province of Saskatchewan. Oilsands Quest is incorporated in Colorado, U.S.A. Its main operating subsidiaries are Oilsands Quest Sask Inc., Township Petroleum Corporation and Oilsands Quest Technology Inc.
(source: company press release or website)
Buy-the-Dip trigger: $1.15
BUY the stock at $1.15
Chart of BQI:
Active Watch List Candidates:
AVY $ 37.79 -0.53 -- Avery Dennison
AVY soared to new 2009 highs last week. Shares are very overbought and due for some profit taking. I would expect some selling after the company announces earnings on October 27th (before the market opens). A 50% correction of the current run would be about $31.55. We'll keep our trigger at $32.00 for now. I expect it will take a couple of weeks or longer before we're triggered. If triggered our stop loss is $29.40.
Our long-term target is $44.50.
Buy-the-Dip trigger: $32.00
BUY the 2010 January $35 calls (symbol: AVY-AG)
Chart of AVY:
BUCY $48.36 +5.83 -- Bucyrus Intl.
It looks like we missed the boat on BUCY. Shares rallied sharply into earnings and then soared on Friday after it reported earnings. I'm still bullish on the stock but short-term it's way too overbought to consider bullish positions.
I am removing it from the play list and will wait for a correction.
Chart of BUCY:
CHK $26.73 -1.21 -- Chesapeake Energy Corp.
Energy stocks look like they could still see some significant profit taking. I am moving our trigger to buy LEAPS on CHK down to $24.00. More conservative traders may want to move it down to $22.00. I'm adjusting the stop loss to $20.75. If triggered our target is $40.00.
Buy-the-Dip trigger: $24.00
BUY the 2011 January $25 calls (symbol: VEC-AE)
Chart of CHK:
CR $27.19 -0.38 -- Crane Co.
CR is still consolidating sideways. That might change after the company reports earnings on October 26th. Our plan is to buy LEAPS on a dip at $24.25. If triggered our target is $34.75 and our stop is $21.90.
Buy-the-Dip trigger: $24.25
BUY the 2010 March $25 calls (CR-CE)
Chart of CR:
ESV $50.32 +1.13 -- ENSCO Intl. Inc.
ESV is showing relative strength and broke out to new highs on Friday. The stock is very overbought and due for a correction. I am raising our trigger from $40.00 to $42.00. If triggered at $42.00 we'll use a stop at $37.25. We're going to aim for the $55-60 zone.
Buy-the-Dip trigger: $42.00
BUY the 2011 January $45 call (VKS-AI)
(More aggressive traders may want to trade January 2010 or March 2010 calls instead)
Chart of ESV:
GHM $16.03 -0.52 -- Graham Corp.
The correction in GHM is right on schedule. The (new) plan is to buy June 2010 LEAPS on a dip at $15.15. Investors will want to note that GHM is due to report earnings on October 30th before the opening bell. More conservative traders may want to wait until after the earnings report before initiating positions.
We can now buy June instead of March calls. However, as an alternative investors may want to just buy the stock instead. Our target is $24.00. We'll use a stop loss at $12.40.
Buy-the-Dip trigger: $15.15
BUY the 2010 June $15.00 Call (GHM-FC)
BUY the stock (GHM) at $15.15
Chart of GHM:
MTW $11.63 +0.10 -- Manitowoc Inc.
MTW continues to hit new highs. The stock might see some profit taking after the company reports earnings on October 29th. I am raising our trigger to open bullish positions from $8.60 to $9.10.
It may take a couple of weeks for MTW to hit our entry point. Our long-term target is $17.00.
Buy-the-Dip trigger: $9.10
BUY the 2011 January $10 calls (symbol: VMT-AB)
or BUY the STOCK at $9.10
Chart of MTW:
PCX $11.57 -0.75 -- Patriot Coal Corp.
PCX has continues to correct as we expected. Please note that I'm adjusting our strategy to reduce our risk. Our new trigger to open positions is at $10.75. Our new stop loss is $9.75. Our long-term target is the $20-25 zone.
Investors may want to wait until after we see how the market reacts to the company's earnings on October 27th before considering new bullish positions.
Buy-the-Dip trigger: $10.75
BUY the 2011 January $15 LEAP call (OKI-AC)
Buy the stock @ 10.75.
Chart of PCX:
TRN $18.12 -0.50 -- Trinity Industries
Nothing has changed for us. TRN is still consolidating sideways. We want to buy LEAPS on a dip at $16.25. If triggered we'll use a stop at $13.90. I would use small positions (about 1/2 our normal trade or less). Earnings are expected on October 28th. Readers may want to wait and see the reaction to earnings first on the 29th before considering new positions.
Our target is the $25-30 zone. More conservative traders may want to use a stop closer to $15.00.
Buy-the-Dip trigger: $16.25
BUY the 2011 January $20 LEAP call (XYT-AD)
Chart of TRN:
TXT $19.13 -0.51 -- Textron Inc.
TXT is still consolidating sideways but the tone has turned a bit more bearish. I am lowering our trigger to open positions from $16.25 to $15.00.
If triggered we'll use a stop loss at $13.45. Our long-term target is the $30 region.
FYI: Earnings are October 27th before the opening bell. I would expect some profit taking after earnings.
Buy-the-Dip trigger: $15.00
BUY the 2011 January 17.50 call (symbol: XUD-AW)
Chart of TXT: