Editor's Note:

Investors should remain cautious with the S&P 500 under resistance at the 1100 level and the small cap Russell 2000 under performing the rest of the market.

I'm removing a few candidates where the trigger is just too far away to be practical and replacing them with more realistic watch list candidates.


New Watch List Entries

DE

DSX

GNK


Active Watch List Candidates

BQI - Oilsands Quest, Inc.

ESV - ENSCO Intl. Inc.,

TXT - Textron Inc.


Dropped Watch List Entries

AVY - Avery Dennison
CR - Crane Co.
PCX - Patriot Coal Corp.
TXT - Textron Inc.


New Watch List Candidates:

DE $47.58 +0.17 -- Deere & Co.

If the economy is recovering then business should start picking up for DE. Check out the stock's long-term weekly chart. Shares have built a huge base with resistance at $50.00. A breakout over $50 would be an excellent entry point for bullish positions.

I'm suggesting a trigger to buy LEAPS at $51.00. If triggered our long-term target is $69.50. Currently the Point & Figure chart is bullish with a $66 target. FYI: Readers will want to note that DE is due to report earnings around November 25th.

Company Info:
John Deere consists of three major business segments (agriculture and turf, construction and forestry, and credit). Those segments, along with the support operations of parts and power systems, are focused on helping customers be more productive as they help to improve the quality of life for people around the world. The company's products and services are primarily sold and serviced through John Deere's dealer network. (source: company press release or website)

Breakout trigger: $51.00

BUY the 2011 January $50 LEAPS (symbol: VER-AJ)

Chart of DE:


DSX $16.30 +0.75 - Diana Shipping Inc.

The shipping stocks have been soaring on strength in the Baltic Goods Index, which measures prices (and thus demand) for transporting goods by freighter. Shares of DSX have rallied to new multi-month highs. The bullish breakout is great but DSX actually looks a little overbought here.

I'm suggesting investors buy LEAPS on a dip at $14.50. This is a volatile sector so I wouldn't be surprised to see a retracement toward $14.00. The P&F chart is currently bullish with a $23.00 target. If we're triggered at $14.50 I'm setting our long-term target at $24.00. We'll use a stop loss at $11.85.

Company Info:
Diana Shipping Inc. is a global provider of shipping transportation services, and specializes in transporting dry bulk cargoes, including such commodities as iron ore, coal, grain and other materials. The Company is incorporated in the Marshall Islands; our principal executive offices are in Athens, Greece. (source: company press release or website)

Buy-the-Dip trigger: $14.50

BUY the 2011 January $15.00 LEAPS (symbol: XDJ-AC)

Chart of DSX:


GNK $24.91 +0.81 -- Genco Shipping

GNK is another shipping stock that's showing lots of relative strength. Shares broke out over resistance near $24.00 last week but shares look overbought with a 25% rally off its November lows. The big volume on the rally is bullish but I don't want to chase it here, not with the S&P 500 still under resistance.

I'm suggesting readers use a trigger at $22.50 to buy LEAPS. If triggered we'll use a stop loss at 18.90 and set our long-term target at $39.00. The P&F chart is bullish with a $40 target.

Company Info:
Genco Shipping & Trading Limited is an international ship owning company. We transport iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. Our wholly owned modern fleet of dry cargo vessels consists of Panamax, Handymax and Handysize vessels that provide an essential link in international trade. Ours is a global industry and Genco Shipping & Trading Limited is very well placed to serve it professionally and competitively (source: company press release or website)

Buy-the-Dip trigger: $22.50

BUY the 2011 January $30 call (symbol: OKJ-AF)

Chart of GNK:


Active Watch List Candidates:


AVY $ 39.21 +0.52 -- Avery Dennison

I am dropping AVY as a watch list candidate. The trend is up but shares are too extended to consider long-term positions. More nimble traders may want to watch it for a short-term trade.

I'm putting it on my personal watch list for a pull back toward its long-term trendline of higher lows (just watch the 100-dma). Our trigger was at $31.50, which seems a bit too far away.


BQI $1.21 -0.06 -- Oilsands Quest Inc.

Crude oil looks vulnerable to more selling. That could be the catalyst we need to pull BQI down toward round-number support at the $1.00 level.

We are keeping our trigger on BQI at $1.05. If triggered our stop loss is at $0.85. 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 long-term target at $2.90.

Buy-the-Dip trigger: $1.05

BUY the stock (not options) at $1.05

Chart of BQI:


CR $29.02 +0.20 -- Crane Co.

I'm removing CR as a watch list candidate. The long-term trend is still bullish but we need to see a correction first. Shares should have some support in the $25-24 zone. I'm moving it to my personal watch list for a dip near its 100-dma. Our last trigger was un-hit at $22.60.


ESV $45.94 +0.84 -- ENSCO Intl. Inc.

ESV has pulled back toward short-term support in the $44.50 zone. Short-term technical indicators have turned bearish. If the market corrects we have a good chance of getting triggered at $42.50. More conservative traders may want to use a trigger closer to $40.00 and its 100-dma. If triggered at $42.50 we'll use a stop at $37.25. Our target is the $55-60 zone.

Buy-the-Dip trigger: $42.50

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:


PCX $12.92 +0.22 -- Patriot Coal Corp.

I'm dropping PCX from the watch list. We already have multiple coal stocks in our LEAPS portfolio. Almost all of them, including PCX, are forming a bearish head-and-shoulders pattern. I'd still keep an eye on PCX for support near its 200-dma. Of course it would have to break round-number support near $10.00 first.


TXT $19.81 -0.15 -- Textron Inc.

I'm dropping TXT as a bullish LEAPS candidate. The stock appears to be forming a bearish double top with the peaks in September and now in November. A strong close over the $21.00 level could change our perspective. Nimble traders may want to consider bearish positions if TXT breaks down under $17.50.