New Watch List Entries

FXB - CurrencyShares British Pound


Active Watch List Candidates

AKAM - Akamai Technologies

MCD - McDonald's Corp.

MSFT - Microsoft Corp.

PETM - PETsMART

PNRA - Panera Bread Co.

PPDI - Pharmaceutical Product Development Inc.

WMT - Wal-Mart Stores Inc


Dropped Watch List Entries

BRK.B has been promoted to an active trade.


New Watch List Candidates:

FXB - CurrencyShares British Pound Sterling $155.83 -1.21

Investor focused has turned to Europe and all the troubles facing their growing debt burden and possible defaults among the PIIGS countries. While Britain is not one of the five countries currently under the microscope there has been a growing worry about the country's economic rebound. It has been the slowest of the big economies to recover. The British Pound has broken key support this past week.

Aggressive traders may want to go ahead and buy put options now! I think we can get a better price if we wait for a bounce back toward $158.00. I'm suggesting a trigger to buy puts at $157.50. If triggered we'll use a stop loss at $162.55. Our first target is $150.00. Our second target is $144.00.

Company Info:
The CurrencyShares British Pound Sterling is an Exchange Traded Fund (ETF) that tries to mimic the performance of the British Pound measured in U.S. dollars. According to the company's website: The British pound sterling is the fourth-most-traded currency in the world, accounting for 15% of global foreign exchange transactions. The USD/British pound sterling pair is the third-most-traded currency pair, accounting for 12% of the global foreign exchange transactions. (source: company press release or website)

Buy-the-Bounce trigger: $157.50

BUY the 2010 September $150 put (FWK1018U150)

Chart of FXB:


Active Watch List Candidates:


AKAMAI Tech. - AKAM - $25.32 -0.19

It looks like traders are selling the earnings news. AKAM reported earnings on Feb. 3rd. There was not a very big reaction in the stock price but shares do look ready to correct lower in spite of all the bullish analyst comments following the earnings report.

I am raising our trigger to buy LEAPS from $21.50 to $22.10. I want to stay above the rising 200-dma. If triggered our long-term target is $29.50. We'll start with a stop loss at $17.99.

Buy-the-Dip trigger: $22.10 *new*

BUY the 2011 January $25.00 calls (OMU1122A25)

Chart of AKAM:


MCD $63.37 -0.69 -- McDonald's Corp.

MCD was added to the Goldman Sachs "conviction buy list" last week. The stock soared to a new 52-week high on the news. Traders promptly sold into strength as the market fell to new relative lows. I don't see any changes from my prior comments. We're waiting to buy LEAPS on a dip at $60.00 . You could wait for a dip toward the 200-dma near $58.00 instead. If triggered at $60 we'll use a stop loss at $53.95. Our long-term target is $74.50. I'm suggesting the 2011 LEAPS. You may want to buy the 2012 instead.

Buy-the-Dip trigger: $60.00

BUY the 2011 January $65 calls (VMD-AM)

Chart of MCD:


Microsoft - MSFT - $28.02 +0.18

Thus far MSFT is holding support at the top of its gap from late last year. I do think the correction continues. Right now the plan is to buy LEAPS on a dip at $25.00 but we might want to consider launching positions on a dip near the rising 200-dma (near 25.75). If triggered we'll use a stop loss at $22.75. Our long-term target is $35.00.

Buy-the-Dip trigger: $25.00

BUY the 2012 January $25 calls (WMF1221A25)

Chart of MSFT:


PETM $25.35 -0.17 -- PETsMART Inc.

Traders bought the dip twice near $25.00 this past week. It's certainly possible that PETM rallies from here but I'm still expecting a pull back toward stronger support near $24.00 and its rising 200-dma. If triggered our stop loss will be $21.40. Our long-term target is the $34-35 zone but given the lack of LEAPS we'll aim for 29.00.

Buy-the-Dip trigger: $24.00

Readers may want to consider buying the stock. PETM doesn't have LEAPS. The longest-dated options are 2010 Julys. BUY the 2010 July $25 calls (QPT-GE)

Chart of PETM:


PNRA $70.60 -0.70 -- Panera Bread Co.

PNRA is still holding up pretty well considering the market's recent weakness. Shares still look overbought. We want to use a trigger to buy LEAPS at $65.50. If triggered we'll use a stop loss at $59.50. Our long-term target is the $84.50 level.

Readers should be aware that PNRA is due to report earnings on Feb. 11th after the market's closing bell. Shares could see some volatility following the report.

Buy-the-Dip trigger: $65.50

BUY the 2011 January $70 calls (ZGM-AN)

Chart of PNRA:


PPDI $22.50 +0.08 -- Pharmaceutical Product Development Inc.

PPDI is still trading sideways within its prior range. The stock fell under its 50-dma and 100-dma but managed to rebound near its January lows. There is no change in our plan. We want to use a trigger to buy LEAPS at $24.25.

If triggered at $24.25 we'll use a stop loss at $21.90. Our first target is $29.25.

Readers should be aware that PPDI is due to report earnings on February 8th after the market's close. Shares could see some volatility following the report.

Breakout trigger: $24.25

BUY the 2010 July $25.00 calls (symbol: PJQ-GE)

Chart of PPDI:


WMT $53.45 +0.48 -- Wal-Mart Stores Inc.

Shares of WMT continue to churn sideways in the $52.50-55.00 zone. The stock doesn't move very fast. It could take a while before WMT hits our trigger to open positions at $50.50. If triggered we'll use a stop loss at $46.75. Our first long-term target is $62.50. More aggressive traders may want to use the 2011 January calls (the $50 strike VWT-AJ).

FYI: WMT is due to report earnings on Feb. 18th.

Buy-the-Dip trigger: $50.50

BUY the 2012 January $50 calls (WWT-AJ)

Chart of WMT: