New Watch List Entries
CIR - CIRCOR Intl.
MDR - McDermott Intl.
SAFM - Sanderson Farms Inc.
Active Watch List Candidates
CRS - Carpenter Technology
EMC - EMC Corp.
IMN - Imation Corp.
RT - Ruby Tuesday, Inc.
TRMB - Trimble Navigation
TSCO - Tractor
Dropped Watch List Entries
I am dropping the XHB as a watch list candidate.
New Watch List Candidates:
CIRCOR Intl. - CIR - close: 33.66 change: +0.90
Shares of this industrial goods company have continued to show relative strength. CIR spent over a year building a base under resistance near the $30 level. In the past couple of months shares have managed a significant breakout over this pivotal level. A recent string of better than expected earnings results (last three quarters) certainly hasn't hurt investment sentiment for the stock.
Here's the plan. The market looks fragile and I'm expecting a correction. CIR should have support near $30.00 now. I'm suggesting we buy the longest calls available (currently Novembers) if CIR pulls back and hits $30.50. If triggered we'll use a stop at $27.75. Our long-term target is the $40 area.
FYI: The P&F chart is pointing to a $47 target.
CIRCOR International, Inc designs, manufactures, and supplies valves, related products and services to OEMs, processors, manufacturers, the military, and utilities that rely on fluid-control to accomplish their missions. Our products enable end users to control process fluids safely and efficiently in petrochemical, power-generation, scientific (instrumentation) and industrial (manufacturing) applications. (source: company press release or website)
Buy-the-Dip trigger: $30.50
BUY the 2010 NOV $35 calls (CIR 10K35.00)
Chart of CIR:
McDermott Intl. - MDR - close: 25.65 change: -0.28
MDR is a major engineering and construction company. As governments put their stimulus money to work rebuilding infrastructure odds are MDR could be garnering some of the business. Shares have a long-term bullish up trend and are currently creeping toward resistance near the $28.00 level. I am suggesting we use a breakout trigger to buy LEAPS at $28.25. If triggered we'll use a stop loss at $24.75. Our long-term target is $37.50. Investors may want to consider 2012 LEAPS and aim higher. Currently the Point & Figure chart is suggesting a $37 target.
McDermott is a leading engineering and construction company, with specialty manufacturing and service capabilities.The Company provides its services to a variety of customers in the energy and power industries, including the U.S. Government. McDermott operates in 23 countries and has over 20,000 employees
(source: company press release or website)
Breakout trigger: $28.25
BUY the 2011 JAN $30.00 CALLS (MDR 11A30.00)
Chart of MDR:
Sanderson Farms Inc. - SAFM - close: 56.04 change: +1.18
Shares of SAFM have spent years trading under major resistance at $50.00 and the $55.00 levels. Now in just the last few weeks the stock has broken out past both. A string of significant earnings beats over the last four quarters does not hurt the fundamental picture. Right now the market looks overbought. We want to be ready to buy the dip in SAFM. I am suggesting we use a trigger at $51.00 to buy options. Unfortunately the longest-dated options currently available are Novembers. If triggered we'll use a stop loss at $44.90. Our target is $59.75. I would aim higher but we only have a few months.
Sanderson Farms has grown from a small general feed and seed business in 1947 to one of the nation's leading food corporations in 2009, with sales of more than $1.78 billion. We are currently the fourth largest poultry producer in the U.S., processing over 2.4 billion pounds of meat annually.
(source: company press release or website)
Buy-the-Dip trigger: $51.00
BUY the 2010 NOV $55 calls (SAFM 10K55.00)
Chart of SAFM:
Active Watch List Candidates:
Carpenter Technology - CRS - close: $35.29 change +1.15
Shares of CRS have continued to hold to its gains in spite of weakness in the basis materials sector. Please note I am adjusting our entry point to $30.00 and raising our stop loss to $27.45. Our long-term target is $44.50. Currently the Point & Figure chart is very bullish with a $57 price target.
Buy-the-Dip trigger: $30.00
BUY the 2010 September $35 calls (symbol: CRS1018I35)
Chart of CRS:
EMC Corp. - EMC - close: 18.56 change: -0.17
Not much has changed. EMC is still consolidating sideways in the $18.50-19.00 zone. I am adjusting our trigger to buy the dip down to $17.50. We'll keep the tight at $16.24, just under the 200-dma.
If triggered our long-term target is $22.50. FYI: The Point & Figure chart is bullish with a $34.50 target. (Readers may want to buy 2012 calls and aim higher)
Buy-the-Dip trigger: $17.50
BUY the 2011 January $20.00 LEAP CALL (symbol: VUE1122A20)
Chart of EMC:
Imation Corp. - IMN - close: 11.46 change: +0.00
IMN managed to tag new 52-week highs last week. Unfortunately it wasn't able to hold on to those gains. This suggest the rally is running out of steam and IMN is nearing a correction.
I am suggesting we buy the stock (or calls) on a dip at $10.15. If triggered our first target is $12.25. Our second target is $14.25. FYI: The Point & Figure chart is bullish with a $17.50 target.
Buy-the-Dip trigger: $10.15
Buy the IMN stock at $10.15
BUY the 2010 October $12.50 call (symbol: IMN1016J12.5)
Chart of IMN:
Ruby Tuesday Inc. - RT - close: $10.90 change: +0.03
RT has managed to extend its gains as we near the close of the first quarter. Shares remain very overbought and I suspect money managers are merely waiting for the quarter to end before locking in gains. We want to take advantage of any pull back.
I am suggesting we use a dip to $9.50 as our entry point. We'll use a stop loss at $7.90.
I am suggesting readers buy the stock but options are available so we will list both. If triggered our first target is $12.25. Our second, longer-term target is $14.75. FYI: The Point & Figure chart is very bullish with a $19 target.
FYI: Readers should note that RT is due to report earnings on April 7, 2010. It can be dangerous to hold a position over earnings. Readers may want to wait until after we see the market reaction to RT's numbers before initiating positions even if shares hit our trigger beforehand.
Buy-the-Dip trigger: $9.50
BUY the stock at $9.50
- or -
BUY the 2010 October $10.00 calls (symbol: RT1016J10)
Chart of RT:
Trimble Navigation - TRMB - close: 28.21 change: +0.05
TRMB rallied to new one-year highs midweek. Yet now it looks like the rally is reversing and the correction may have already begun. We want to be ready to buy the dip. Broken resistance near $26.00 should offer new support. I'm suggesting a trigger to buy calls at $26.05. If triggered we'll use a stop loss at $23.95. Our first target is $29.95. Our second target is $32.25. FYI: The P&F chart is bullish with a $42 target.
Buy-the-Dip trigger: $26.05
BUY the 2010 August $30 calls (symbol: TUH1021H30)
Chart of TRMB:
Tractor Supply Co. - TSCO - close: 58.23 change: +0.14
The situation is similar here with TSCO. Shares managed to tag a new 52-week high a few days ago but since then it appears the correction may have begun. Broken resistance near $55.00 should offer support.
I'm suggesting a trigger to buy calls on a dip at $55.25. If triggered our first target is $69.00. We'll use a stop loss at $49.75.
Buy-the-Dip trigger: $55.25
BUY the 2010 October $55 call (symbol: QTF1016J55)
Chart of TSCO:
Homebuilders ETF - XHB - close: 16.96 change: +0.08
It was close but no cigar!
The XHB hit $17.21 on Thursday before reversing. Our trigger to open positions has been $17.25. I am dropping the XHB as a bullish candidate due to news out this past week. The government said the sale of new homes fell to an all-time historic low since records began more than 40 years ago. That cannot bode well for earnings. Even though the chart looks bullish I suggesting we avoid launching new bullish trades for now. Let's see how the sector looks after the next earnings season.