Editor's Note:

The stock market's rally seems to have stalled. While I remain bullish on the market I still hesitate to chase this move higher. Instead of listing new full-fledge watch list candidates tonight, I'm posting a list of stocks on my radar screen so you can see what I'm watching this week. You could say it's a watch list for our watch list.

AKS - this steel stock is showing lots of relative strength. AKS just broke out past its 200-dma after spending more than six months building a new base.

NIHD - This telecom stock has broken out to new two-year highs. Aggressive traders could look at positions now. I am watching for a correction back into the $44-42 zone as a possible entry point.

CMP - This company is in the agriculture/fertilizer business. Shares are trading near all-time highs. Broken resistance near $82.50 could be significant support and a good spot to look for an entry point.

ALEX - This shipping company has seen its stock rallied to new two-year highs. Broken resistance near $37.00 looks like a good spot to look for support.

EXBD - This is another transportation stock that is sitting at new two-year highs. A pull back into the $35-34 zone might be a new entry point.

RMD - This medical equipment maker has broken out from an eight-month consolidation pattern. I am watching for a dip back toward the $34.50 level as a potential entry point.

NYB - Financial stocks offer a lot of potential for 2011. The banking indices are starting to bounce again. NYB tagged new two-year highs on Thursday. A dip near $17.50 might be a potential entry point.

NCR - This financial services (information tech) company is slowly marching higher. I am watching for a dip back toward the trendline of higher lows (maybe near the rising 50-dma).

KBH - I remain very, very cautious on the homebuilders. The real estate market could take years to recover. However, I have to admit that KBH looks like it's poised to breakout from a six-month base. Readers might want to consider bullish positions on a move over its 200-dma.

LPX - This lumber company is heavily connected to the new home industry. It too appears to be breaking out from a significant base. I wouldn't chase it here. The $8.50 level could be significant support.

AM - This stock has already broken out from its consolidation pattern but the action last Monday looks like a possible bearish reversal pattern. Another bounce near $21.00 or the 200-dma could be a possible entry point.

TBL - The big spike higher in November was a reaction to earnings. Now the consolidation pattern has a bullish trend of higher lows. A close over $26.00 or a rally past the early November high could be an entry point but I would consider this an aggressive, higher-risk trade.

DBRN - This retailer could be a bullish candidate now but I am wondering if we might see a better entry point on a dip or a bounce near its 50-dma in the $24.50 area. Of course a close under the 200-dma would be worrisome. We may want to watch this stock for a couple of more weeks to see how it closes out the year.

MS - A close over $27.50 and its trendline of lower highs could be the bullish signal we need on this financial company.

PEP - Believe it or not but PEP is starting to look bullish again. I was almost tempted to buy call LEAPS on it now given the new December trend of higher lows. Bigger picture PEP never really broke the long-term trend of higher lows. Aggressive traders (with patience) could buy calls now. I am watching resistance near $67-68. PEP's rival (KO) looks extremely overbought and I wonder how will PEP react when KO finally corrects?

Well there you have it. This is a good portion of the stocks currently on my radar screen.

-James

Active Watch List Candidates:


Compania de Minas Buenaventura - BVN - close: 47.36

BVN is still correcting lower and shares are getting closer and closer to potential support near $46.00 and its 100-dma. I am suggesting that we buy the June $50 calls on a dip to the $46.00 mark. More conservative traders could wait for a dip closer to $45.00 or $44.00 before initiating positions. If triggered I'm suggesting we use a stop loss at $41.90. Keep your position size small to limit your risk.

Buy-the-Dip trigger: $46.00 (half a position)

BUY the 2011 JUNE $50 calls (BVN1119F50)


Ford Moto Co. - F - close: 16.80

Ford has been stuck in a sideways consolidation. Short-term traders may want to consider new positions on a move over $17.00. We want to wait for a correction before launching long-term trades. At the moment we want to see a dip to $14.50. That may be wishful thinking on our part. Keep an eye on the 50-dma for potential support. If we don't see Ford begin correcting in the next week I'll remove it from the watch list.

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)


Gamestop Corp. - GME - close: $21.67

GME almost hit our trigger this past week. Shares dipped to the $21.30 area a couple of times. We had a trigger to buy calls at $21.25. I am actually moving that trigger lower to the $21.00 mark. Depending on your risk tolerance we could open positions anywhere in the $21.00-20.00 zone. If triggered I'm suggesting a stop loss at $18.90. I would be very surprised to see GME breakdown under $20.00. Our long-term targets are $24.90 and $29.75.

Buy-the-Dip trigger: $21.00

BUY the 2012 January $22.50 call (GME1221A22.5)

- or -

BUY the 2013 January $25.00 call (GME1319A25)

Originally listed on the Watch List: 12/11/10


Mattel Inc. - MAT - close: 25.66

MAT almost hit our trigger to buy calls at $25.00. The low on Thursday was $25.04. I would seriously consider launching new positions now at current levels. However, there is a chance we could see a better entry point on a dip toward the rising 50-dma. I am lowering our suggested entry to $24.75. If triggered at $24.75 we want to use a stop loss at $22.75. Our long-term targets are $29.00 and $36.00.

Buy-the-Dip trigger: $24.75

BUY the 2012 January $25.00 calls (MAT1221A25)

- or -

Buy the 2013 January $25.00 calls (MAT1319A25)

Originally listed on the Watch List: 12/04/11


Starbucks Corp. - SBUX - close: 32.79

SBUX continues to trade inside its narrow, bullish channel. We don't' want to chase it. We will keep our buy-the-dip trigger at $28.50 for now but it could take weeks before SBUX corrects that low.

Buy-the-Dip trigger: $28.50

BUY the 2012 January $30.00 calls (symbol: SBUX1221A30)


Target Corp. - TGT - close: 58.52

TGT has begun to correct lower. I am suggesting we launch long-term bullish positions on a dip at $57.00. Actually we can use the $57.00-55.00 zone as our entry point range. If triggered we'll start with a stop loss at $53.75. Our long-term target is $69.75.

Buy-the-Dip trigger: $57.00

BUY the 2012 January $60 calls (TGT1221A60)

- or -

BUY the 2013 January $65 calls (TGT1319A65)

Originally listed on the Watch List: 12/11/10


U S G Corp. - USG - close: 14.96

USG continues to show relative strength. Shares have rallied toward resistance near $15.00 and its 200-dma. I'm suggesting a trigger at $15.25. If triggered our first long-term target is $19.90. Our second is $24.75. We'll start the play with a stop loss at $12.75. If USG fails at $15.00 again then nimble traders may want to consider buying calls on a dip or a bounce near $13.00 but if you do I'd use a very tight stop loss (say $12.40). FYI: Investors may want to note that USG has a relatively high amount of short interest. The most recent data listed short interest at almost 19% of the 69 million-share float. A breakout could spark some short covering.

Breakout trigger: $15.25

BUY the 2012 January $20.00 calls (USG1221A20)

- or -

BUY the 2013 January $20.00 calls (USG1319A20)

Originally listed on the Watch List: 12/11/10


United Parcel Service - UPS - close: 73.06

There is no change from my prior comments on UPS. We want to wait for a dip to $70.55. 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: $70.55

BUY the 2012 January $75 calls (UPS1221A75)

- or -

BUY the 2013 January $80 calls (UPS1319A80)

Originally listed on the Watch List: 12/04/10


Whiting Petroleum Corp. - WLL - close: 113.84

WLL, like most of the energy sector, consolidated sideways last week. I am suggesting we look for a dip toward the 50-dma so we need to adjust our entry point trigger to $107.50. If triggered use a stop at $99.75. I have updated our option strikes.

Buy-the-Dip trigger: $107.50 <-- new trigger

BUY the 2011 March $115 calls (WLL1119C115)

- or -

BUY the 2012 January $120 calls (WLL1221A120)


United States Steel Corp. - X - close: 58.90

Wow! The rally in X is accelerating higher. We don't want to chase it. I am raising our buy-the-dip trigger to $54.00. We'll start the play with a stop loss at $48.75. Our long-term targets are $64.75 and $74.75.

Buy-the-Dip trigger: $54.00

BUY the 2012 January $60.00 calls (X1221A60)

- or -

BUY the 2013 January $60.00 calls (X1319A60)

Originally listed on the Watch List: 12/11/10