New Watch List Entries

ISRG - Intuitive Surgical

OXY - Occidental Petroleum

SBUX - Starbucks Corp.


Active Watch List Candidates

BUCY - Bucyrus Intl.

BVN - Compania de Minas Buenaventura

CHRW - CH Robinson Worldwide

MA - Mastercard Inc.

TASR - TASER Intl

WLT - Walter Energy


Dropped Watch List Entries

NTAP graduated to the play list.


New Watch List Candidates:

Intuitive Surgical - ISRG - close: 315.70 change: -1.30

It appears that investors are disregarding ISRG's latest earnings report, which had pretty impressive headline numbers and strong margins. Instead traders are selling into strength and the bearish pattern of lower highs is pushing ISRG against support near $300.00. A breakdown under the $300 level could herald a significant correction lower.

ISRG is a high-dollar and volatile stock. The options are not cheap. I consider this an aggressive, higher-risk trade. I am suggesting a trigger to open bearish positions at $299. If triggered we'll use a stop loss at $321. Our target is $250 (although we might adjust that to $260). Keep your positions small.

Company Info:
Intuitive Surgical, Inc., headquartered in Sunnyvale, California, is the global technology leader in robotic-assisted, minimally invasive surgery. Intuitive Surgical develops, manufactures and markets robotic technologies designed to improve clinical outcomes and help patients return more quickly to active and productive lives. The Company's mission is to extend the benefits of minimally invasive surgery to the broadest possible base of patients. Intuitive Surgical - Taking surgery beyond the limits of the human hand(TM). (source: company press release or website)

- This is a PUT Play -

Break Down trigger: $299.00

BUY the 2011 Jan $250 put (ISRG1122M250)

I'm suggesting an option significantly out of the money. This is probably going to be a real black or white win/lose situation.

Chart of ISRG:


Occidental Petroleum - OXY - close: 75.39 change: -1.07

Shares of OXY have been trading sideways in the $74-90 zone for almost a year. The stock has developed a bearish trend of lower highs. Now that the market is breaking down and the oil sector is rolling over (and the dollar is rising, which could put some pressure on oil), it looks like OXY could finally break support.

I am suggesting a trigger at $74.00 to buy puts. If triggered we'll use a stop loss at $80.25. Our first target is $65.50. Our second target is $60.25. I prefer the 2012 puts over the 2011 puts but both should work.

Company Info:
Occidental Petroleum Corporation is an international oil and gas exploration and production company with operations in the United States, Middle East/North Africa and Latin America regions. Oxy is the fourth largest U.S. oil and gas company, based on equity market capitalization. Oxy's wholly owned subsidiary, OxyChem, manufactures and markets chlor-alkali products and vinyls. Occidental is committed to safeguarding the environment, protecting the safety and health of employees and neighboring communities and upholding high standards of social responsibility in all of the company's worldwide operations (source: company press release or website)

- This is a PUT Play -

Break Down trigger: $74.00

BUY the 2011 Jan $60 puts (OXY1122M60)

- or -

BUY the 2012 Jan $60 puts (OXY1221M60)

Chart of OXY:


Starbucks Corp. - SBUX - close: 23.99 change: -0.47

Consumers are nervous. They are worried about their jobs and their homes so they're spending less and saving more. This could have a negative impact on SBUX with their expensive coffee drinks. Shares have already formed a bearish head-and-shoulders pattern. A breakdown under $24.00 and its 200-dma could be an entry point for puts. The low in July was $23.47.

I am suggesting a trigger to buy puts at $23.30. If triggered our first target is $20.15. Our second target is $18.25.

Company Info:
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup (source: company press release or website)

- This is a PUT Play -

Break Down trigger: $23.30

BUY the 2011 Jan $20 put (SBUX1122M20)

- or -

BUY the 2012 Jan $20 put (SBUX1221M20)

Chart of xxx:


Active Watch List Candidates:

Bucyrus Intl. - BUCY - close: 58.71 change: -0.64

Concerns over the economic slowdown getting worse was painful for mining-related stocks. BUCY fell toward technical support at its 200-dma last week. The low was $57.22 on Thursday. I suspect this correction has a lot further to go and while BUCY has additional support near $55 shares still have a good chance of hitting their long-term trendline (see chart below). I am lowering our trigger to buy calls down to $51.50. We'll lower our stop loss to $47.00. Our first target is $69.00. FYI: I prefer the 2012 call LEAPS but the 2011s should work.

Buy-the-Dip trigger: $51.50 *new*

BUY the 2011 Jan $60 calls (BUCY1122A60) *adjusted*

- or -

BUY the 2012 Jan $70 calls (BUCY1221A70)

Chart of BUCY:


Compania de Minas Buenaventura - BVN - close: 37.92 change: +0.21

BVN displayed some unexpected strength late last week but I suspect this bounce will fail near $38.00 and its 50-dma. We are waiting for a pull back toward the trendline of higher lows. I am adjusting our trigger to buy calls down to $32.50. We'll move the stop loss down to $29.49. Our first target is $42.25. Our second, more aggressive target is $47.50.

Buy-the-Dip trigger: $32.50 *new*

BUY the 2011 March $35 calls (BVN1119C35) *adjusted*

Chart of BVN:


CH Robinson Worldwide Inc. - CHRW - close: 64.60 change: -0.29

We have been waiting for shares of CHRW to correct. That correction has finally begun with a failed rally and bearish engulfing candlestick pattern this past week. The $62.00 level should offer some support and I'm moving our trigger to launch positions down to $62.00. More conservative traders may want to hold off and wait for a dip closer to $60.00. If triggered we will use a stop loss at $57.75. Our first long-term target is $67.50. Our second, long-term target is $72.50.

Buy-the-Dip trigger: $62.00 *adjusted*

NOTE: I prefer the 2012 calls!

BUY the 2011 January $65.00 calls (CHRW1122A65)

- or -

BUY the 2012 January $70.00 calls (CHRW1221A70)

Chart of CHRW:


Mastercard Inc. - MA - close: 210.64 change: - 1.19

Hmm.... did you notice the action in MA this past week has taken on a much more bullish tone? The rally stalled near resistance near $217 but what I find interesting is that MA did not see a huge sell-off on Wednesday. Aggressive short-term traders might want to consider bullish positions on a close over $218.00 but look for resistance near $230. Meanwhile for the rest of us, I'm still waiting for a breakdown from this three-month consolidation pattern. The plan is to use a decline at $192.00 as a bearish entry point. More conservative traders can wait for MA to actually close under $192.00. If triggered we'll use a wide stop loss at $213.00. Our first target is $161.00.

FYI: If MA closes over $218.00 we'll drop it as a bearish candidate.

- PUT PLAY -

Break Down trigger: $192.00

I prefer the 2012 PUT LEAPS but the 2011 PUTS should also work well.

Keep your positions small. MA can be a very volatile stock!

BUY the 2011 Jan $180 PUT LEAPS (MA1122M180)

- or -

BUY the 2012 Jan $160 PUT LEAPS (MA1221M160)

Chart of MA:


TASER Intl. - TASR - close: 4.06 change: +0.05

Shares of TASR continue to fade lower. At this point it looks like shares will retest their 2010 lows near $3.60. We might switch to an alternative entry point strategy and look for a bounce near the $3.60 level. However, for now the plan is unchanged. We will wait for a move higher with a trigger at $4.25 to open bullish positions.

This is an aggressive trade and TASR can see big bouts of volatility. If triggered at $4.25 we'll use a stop loss at $3.79. There is some resistance near $5.00 but our first long-term target is $6.00. (Buy the stock, not the options!)

Breakout trigger: $4.25

BUY the stock (TASR) @ 4.25

Chart of TASR:


Walter Energy - WLT - close: 72.76 change: +0.72

It was a volatile week for shares of WLT but that's been a common occurrence this year. WLT spiked toward $80 on Monday but tested its 50-dma near $72 on Thursday morning. Currently our plan is unchanged with a trigger to buy calls at $81.00. However, if we see a close under $68.50 we'll drop WLT as a bullish candidate. If we are triggered at $81 we'll use a stop loss at $74.00. Our target is $99.00.

Breakout trigger: $81.00

BUY the 2011 Jan $90 calls (WLT1122A90)

- or -

BUY the 2012 Jan $100 calls (WLT1221A100)

Chart of WLT: