Editor's Note:

The market's correction has been swift and Thursday's intraday swing was low enough to trigger several of our watch list candidates.


New Watch List Entries

BA - Boeing Co.

CLF - Cliffs Natural Resources

COP - ConocoPhillips


Active Watch List Candidates

CRM - Salesforce.com

CRS - Carpenter Technology

DE - Deere & Co.

RT - Ruby Tuesday, Inc.


Dropped Watch List Entries

CIR, EMC, FLS, IMN, LMT, MICC, and WLT all graduated to the play list.


New Watch List Candidates:

Boeing Co. - BA - close: 66.72 change: -1.25

Shares of BA spent six weeks consolidating sideways above the $70.00 level. Now that the stock has begun to correct I think shares will retest support near $60.00 and its rising 200-dma. Longer-term trend remains higher and as long as the economy continues to improve investor sentiment for BA should remain positive. I am suggesting a trigger to buy call LEAPS on a dip to $60.50. If triggered we will use a stop loss at $54.75. Our long-term target is $79.00. We want to keep positions sizes small to 1/2 or 1/4 your normal trade to limit our risk.

Company Info:
Boeing is the world's leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined. Additionally, Boeing designs and manufactures rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles and advanced information and communication systems. As a major service provider to NASA, Boeing operates the Space Shuttle and International Space Station. The company also provides numerous military and commercial airline support services. Boeing has customers in more than 90 countries around the world and is one of the largest U.S. exporters in terms of sales. (source: company press release or website)

Buy-the-Dip trigger: $60.50 (small size 1/2 to 1/4 normal trade size)

BUY the 2011 January $70 call (BA 11A70.00)

Chart of BA:


Cliffs Natural Resources - CLF - close: 56.12 change: +0.12

Commodity-related stocks still offer potential gains, especially now that they have seen such a sharp correction. I am tempted to buy calls on CLF right here near $55 however, I'm not sure the correction is over yet. I am suggesting we use a trigger at $47.50 to launch bullish positions. If triggered we'll use a stop loss at $39.50. Our first target is $75.00.

FYI: Investors need to know that miners with operations in Australia present greater risk. Currently the Australian government is considering a 40% "resource super profit tax". If this measure gets passed then CLF could see a much larger decline. I would keep your position size small to limit your risk.

Company Info:
Cliffs Natural Resources Inc. (NYSE: CLF)(Paris: CLF) is an international mining and natural resources company. A member of the S&P 500 Index, we are the largest producer of iron ore pellets in North America, a major supplier of direct-shipping lump and fines iron ore out of Australia and a significant producer of metallurgical coal. With core values of environmental and capital stewardship, our colleagues across the globe endeavor to provide all stakeholders operating and financial transparency as embodied by the Global Reporting Initiative (GRI) framework (source: company press release or website)

Buy-the-Dip trigger: $47.50

BUY the 2011 January $60 call (CLF 11A60.00)

- or -

BUY the 2012 January $70 call (CLF 12A70.00)

Chart of CLF:


ConocoPhillips - COP - close: 54.68 change: -0.41

The combination of the oil spill in the Gulf and the 13% plunge in oil futures thanks to the dollar's rally has been tough on the oil sector. COP has seen a 10% correction but still looks bullish. I am actually tempted to buy calls on COP right here near $55.00 but I'm not convinced the correction is over yet. I'm suggesting we use a trigger to open bullish positions at $51.00. If triggered we'll use a stop loss at $46.00. Our first target is $69.00.

Company Info:
ConocoPhillips is an international, integrated energy company with interests around the world. Headquartered in Houston, the company had approximately 29,900 employees, $155 billion of assets, and $179 billion of annualized revenues as of March 31, 2010. (source: company press release or website)

Buy-the-Dip trigger: $51.00

BUY the 2011 January $55 call (COP 11A55.00)

- or -

BUY the 2012 January $60 call (COP 12A60.00)

Chart of COP:


Active Watch List Candidates:

Salesforce.com - CRM - close: 85.60 change: -2.54

CRM tried to hold on to its lofty levels but eventually succumbed to the market wide profit taking. Shares actually traded near $90 this past week only to crash towards $76 on Thursday and Friday. News that Goldman Sachs had upgraded CRM to a buy with a $102 target did not have much of an impact. Our trigger to buy call LEAPS on CRM has been $75.50 and the recent lows have been near $76.00. I am tempted to launch positions now. However, the market tends to move to extremes and I think CRM might overshoot the $75 level and actually trade closer to $70.00. Therefore I'm adjusting our trigger down to $70.50. We'll move the stop loss to $64.00. Our long-term target remains $99.00.

Buy-the-Dip trigger: $70.50 *adjusted

BUY the 2011 January $80 calls (CRM 11A80.00)
- or -
BUY the 2012 January $90 calls (CRM 12A90.00)

Chart of CRM:


Carpenter Technology - CRS - close: $38.45 change +1.10

CRS is actually hold up very well, especially given the weakness in so many commodity-related stocks. The company announced a price increase for some of its stainless steel products. I am still expecting a correction in spite of CRS' recent relative strength. I'm moving our trigger down from $33 to $31 as a momentum stock like CRS will probably over-correct to the downside. We'll move our stop to $26.90. Our long-term target is $44.75. My time frame for CRS to hit our trigger is the next two or three weeks.

Buy-the-Dip trigger: $31.00

BUY the 2010 December $35 calls (CRS 10L35.00) *adjusted*

Chart of CRS:


DE - Deere & Co. - close: 56.38 change: -0.01

DE was not immune to the market weakness but held up reasonably well during Thursday's meltdown. Shares hit $52.73 on Thursday afternoon, not enough to hit our trigger. I am going to keep our trigger at $52.50 but more cautious investors may want to consider using a trigger closer to $50.00. I am adjusting our stop loss to $46.90. Our first target is $69.75.

Buy-the-Dip trigger: $52.50

BUY the 2011 January $55 call (DE 11A55.00)
- or -
BUY the 2012 January $60 call (DE 12A60.00)

Chart of DE:


Ruby Tuesday Inc. - RT - close: $9.93 change: -0.64

A few weeks ago it seemed like RT refused to correct. Now investors are taking profits. The breakdown under the 50-dma and the $10.00 level this past week is certainly short-term bearish. I am expecting this stock to tag prior resistance and what should be strong support near $9.50. More nimble or conservative traders could wait and try to jump in on a dip near $9.00 if RT provides one. October options are the longest ones available so I prefer buying the stock over an option. It could take another two or three weeks before RT finally hits our trigger. If triggered we'll use a stop at $8.45. Our first target is $12.00. Our longer-term target is $14.75.

Buy-the-Dip trigger: $9.50

BUY the stock at $9.50

- or -

BUY the 2010 October $10.00 calls (RT 10J10.00)

Chart of RT: