In addition to tonight's candidates I would keep an eye on FINL. The stock looks like a bullish candidate right now. However, the company is due to report earnings on December 21st. I would hesitate to open long-term positions in front of the earnings announcement.
New Watch List Entries
MAT - Mattel Inc.
UPS - United Parcel Service
Active Watch List Candidates
BVN - Compania de Minas Buenaventura
F - Ford Motor Co.
NFX - Newfield Exploration
SBUX - Starbucks Corp.
WLL - Whiting Petroleum
Dropped Watch List Entries
JAS and LCC graduated to the play list.
New Watch List Candidates:
Mattel Inc. - MAT - close: 26.02
Investors are buying stocks with the belief that the worse is behind us and that the U.S. will continue to recover in 2011. That means that consumer spending should improve and business at MAT should pick up. The stock is already hitting new two-year highs but trades at a discount to its rival Hasbro (HAS). I suspect that if the rally continues into 2011 MAT could make a slow and steady climb toward the $30 highs. The P&F chart is forecasting a move toward $33.00. Keep in mind that MAT doesn't move very fast. I'm suggesting the 2012 calls if MAT dips to $25.00. Readers may want to consider the 2013 calls.
Buy-the-Dip trigger: $25.00
BUY the 2012 January $25.00 calls (MAT1221A25)
Chart of MAT:
Originally listed on the Watch List: 12/04/11
United Parcel Service - UPS - close: 71.80
The transportation sector has broken out to new two-year highs and cleared major resistance. Much like the financials, Dow Theory suggest we can't have a sustained rally without the transports. The relative strength in this sector is very encouraging but on a short-term basis these stocks look a little bit overbought. I am suggesting we play this group through UPS. Broken resistance at $70.00 should be new support. Let's use a trigger to buy call LEAPS at $70.25. If triggered we'll use a stop loss at $65.90. Our long-term targets are $79.50 and $87.50.
Buy-the-Dip trigger: $70.25
BUY the 2012 January $75 calls (UPS1221A75)
- or -
BUY the 2013 January $80 calls (UPS1319A80)
Chart of UPS:
Originally listed on the Watch List: 12/04/10
Active Watch List Candidates:
Compania de Minas Buenaventura - BVN - close: 53.17
BVN slipped to $49.14 last week before traders bought the dip. I still think shares are in the process of correcting. I am moving our trigger lower to $47.00. If triggered we'll use a stop loss at $44.45. Keep your position size small.
Buy-the-Dip trigger: $47.00 (half a position)
BUY the 2011 JUNE $50 calls (BVN1119F50)
Ford Moto Co. - F - close: 16.80
Ford showed some relative strength last week. Unfortunately the stock continues to look too overbought for us to launch long-term positions. Wait for a correction toward the $14.50 level.
If we do get triggered I would start with a small position and slowly build a position over time. If triggered we want to use a stop loss at $12.95.
Buy-the-Dip trigger: $14.50
BUY the stock - or -
BUY the 2012 January $15.00 calls (F1221A15) - or -
BUY the 2012 January $17.50 calls (F1319A17.5)
Newfield Exploration - NFX - close: 70.13
Oil and oil service stocks have been showing strength and NFX surged to new highs. I didn't want to chase it last week and we don't want to chase it now. We will raise our trigger to $63.00.
If triggered I'm listing our stop loss at $57.25.
Buy-the-Dip trigger: $63.00
BUY the 2011 June $65 calls (NFX1118F65)
- or -
BUY the 2012 January $65 calls (NFX1221A65)
Starbucks Corp. - SBUX - close: 32.72
SBUX surged to new multi-year highs. The breakout past $31.00 is very encouraging. Yet I don't want to chase it here. Let's wait and see if the stock returns to the $31-30 zone and re-evaluate an entry point. We'll leave our trigger at $28.50 for now just in case the market sees some profit taking. We'll use a stop loss at $25.90. Our long-term target is $34.75 and $38.75.
Buy-the-Dip trigger: $28.50
BUY the 2012 January $30.00 calls (symbol: SBUX1221A30)
Whiting Petroleum Corp. - WLL - close: 113.49
WLL is another oil stock that is setting new highs. The all-time high was near $112 back in 2008. The breakout past resistance near $110-112 is bullish but I don't want to chase it. There is no change from my prior comments.
I have listed a trigger to launch bullish positions at $102.50. If triggered use a stop at $95.90.
Buy-the-Dip trigger: $102.50
BUY the 2011 March $100 calls (WLL1119C100)
- or -
BUY the 2012 January $110 calls (WLL1221A110)