New Watch List Entries
I am sure that you've noticed the watch list has shrunk significantly. There are two reasons for that. First, the watch list has been successful with a consistent stream of candidates graduating to the play list. Last week both ORCL and UNH hit our trigger and jumped to the play list. The second reason is my expectation for a better entry point in January. The market isn't going anywhere and will likely stay range bound for the rest of 2009. As I said in my commentary tonight odds are growing that we'll see a correction in January. That's when we want to be active and I'll have a fresh list of watch list candidates to buy the dip before we get there.
Active Watch List Candidates
DSX - Diana Shipping Inc.
Dropped Watch List Entries
ORCL - Oracle Corp. and UNH - UnitedHealth Group Inc. both
graduated to the play list.
Active Watch List Candidates:
DSX $14.90 -0.08 - Diana Shipping Inc.
The Baltic Dry Goods index has continued to slide lower and that's putting pressure on DSX and the rest of the shipping industry. The stock is trying to bounce from the $14.50 region, which happens to coincide with the 61.8% Fibonacci retracement of the November rally. Nothing has changed from my prior comments.
I'm sticking to the plan and suggesting readers wait for DSX to hit our trigger at $17.05. We'll use the 2011 January $20 LEAP calls.
More aggressive traders might want to consider jumping in early on a move over $16.00 instead.
If we're triggered at $17.05 I'm setting our long-term target at $24.00. We'll use a stop loss at $14.45.
Buy-the-Breakout trigger: $17.05
BUY the 2011 January $20.00 LEAPS (symbol: XDJ-AD)
Chart of DSX: