Editor's Note:

In addition to tonight's new watch list candidates there were several stocks that caught my eye. I'm still bullish on BA but I'm watching for a dip near $67.50 or a breakout past $76.00. KO might offer some opportunity here but bear in mind the stock does not normally move that fast. REG and O both have a nice bullish trend but they might make better covered-call plays than directional call or LEAPS plays. HSY is on my radar screen but I'm not seeing an entry point yet.


New Watch List Entries

KEY - KeyCorp

LDK - LDK Solar


Active Watch List Candidates

ATI - Allegheny Tech.

CACI - CACI International

Costco Wholesale - COST

FSLR - First Solar, Inc.

HSIC - Henry Schein Inc

JRCC - James River Coal Co.

MAT - Mattel Inc.

MON - Monsanto Co.

Teva Pharmaceuticals - TEVA


Dropped Watch List Entries

AKS, BEAV, BWA, C, CMP, EAT, and GT all made the jump from watch list to play list. NFX and UNH were dropped from the watch list.


New Watch List Candidates:

KeyCorp - KEY - close: 9.29

Company Info

KEY is a large bank that has seen its stock consolidate sideways for almost a year. Yet bigger picture the stock has a bullish trend of higher lows. I am suggesting we launch bullish positions on a dip at $8.60. Alternatively we can look for a breakout and close above round-number resistance at $10.00 as an entry point.

If we are triggered at $8.60 we want to use a stop loss at $7.85. Buy-the-Dip trigger: $8.60

BUY the 2012 January $10.00 call (KEY1221A10)

- or -

BUY the 2013 January $10.00 call (KEY1319A10)

Chart of KEY:

Originally listed on the Watch List: 02/26/11


LDK Solar Co. Ltd. - LDK - close: 14.09

Company Info

Investors continue to buy the dips in LDK and shares are building on a bullish trend of higher lows. Now the stock is facing significant resistance at the $15.00 level. A breakout here could herald the next leg higher. I am suggesting we use a trigger to open bullish positions at $15.55. If triggered our long-term targets are $19.75 and $24.50.

FYI: LDK is due to report earnings on March 29th but that date is not yet confirmed.

Breakout trigger: $15.55

BUY the 2012 January $17.50 calls (LDK1221A17.5)

- or -

BUY the 2013 January $20.00 calls (LDK1319A20)

Chart of LDK:

Originally listed on the Watch List: 02/26/11


Active Watch List Candidates:


Alleghney Technology - ATI - close: 66.36

02/26 update: ATI dipped toward $63 during the market's sell-off. Aggressive traders might want to consider new positions on the bounce. I am suggesting we stay put and wait for a pull back to $61.00. If triggered we'll use a stop loss at $55.75. Our long-term targets are $75 and $85.

Buy-the-Dip trigger: $61.00

BUY the 2012 January $70.00 calls (ATI1221A70)

- or -

BUY the 2013 January $70.00 calls (ATI1221A70)

Originally listed on the Watch List: 02/05/11


CACI International - CACI - close: 58.41

02/26 update: CACI only dipped to $56.00 before bouncing. I don't see any changes from my prior comments. I am suggesting a trigger to open bullish positions at $54.50. If triggered we'll use a stop loss at $51.50. Our targets are the $67.50-70.00 zone. CACI doesn't have LEAPS so we'll have to settle for September calls. FYI: The Point & Figure chart for CACI is bullish with a $65 target.

Buy-the-Dip trigger: $54.50

BUY the 2011 September $60 calls (CACI1117I60)

Originally listed on the Watch List: 02/12/11


Costco Wholesale - COST - close: 73.57

02/26 update: COST has earnings coming up on March 2nd. I want to wait and see investor reaction to the news before we plan an entry point strategy.

Trigger to enter positions: temporarily removed.

Originally listed on the Watch List: 01/29/11


First Solar, Inc. - FSLR - close: 155.72

02/26 update: FSLR reported earnings on Feb. 24th. The results were 4 cents better than expected but revenues were a miss. Management offered bullish guidance but investors are selling the news. The stock was downgraded following the earnings release. Currently we have a trigger to buy calls on a dip at $150.00. There is a chance that FSLR will dip toward support near $140 instead so readers may want to just take a step back and wait to see where FSLR finds support before initiating positions.

If we are triggered at $150.00 we'll use a stop at $139.00. Readers should consider this an aggressive, higher-risk trade. Our long-term target is $195.00.

Buy-the-Dip trigger: $150.00

BUY the 2012 January $170 calls (FSLR1221A170)

- or -

BUY the 2013 January $180 calls (FSLR1319A180)

Originally listed on the Watch List: 02/12/11


Henry Schein Inc. - HSIC - close: 69.42

02/26 update: HSIC is showing relative strength. The stock only saw one serious down day last week and has been rebounding since. Shares look poised to breakout past $70 soon. I do not want to chase it here. I'm leaving our trigger at $63.50 for now but it's unlikely we will be triggered any time soon. (if triggered we'll use a stop at $59.40)

FYI: Aggressive traders may want to buy a dip near $67.00 and just adjust your stop loss higher.

Buy-the-Dip trigger: $63.50

BUY the 2011 Oct $65 call (HSIC1116J65) <-- new strike

Originally listed on the Watch List: 02/05/11


James River Coal Co. - JRCC - close: 21.21

02/26 update: It is starting to look like JRCC will not hit the $20 level. Nimble traders may want to consider buying a breakout past $22.00 or its 50-dma near $23 instead. At the moment we'll leave our trigger at $19.25 but we may need to adjust it higher soon. If triggered we'll use a stop at $17.25. JRCC doesn't have LEAPS so we'll have to settle for 2011 September calls.

Buy-the-Dip trigger: $19.25

BUY the 2011 September $20 calls (JRCC1117I20)

Originally listed on the Watch List: 01/22/11


Monsanto Co. - MON - close: 72.21

02/26 update: MON still looks vulnerable to more profit taking. We have a buy-the-dip entry point at $65.50 with a stop loss at $59.75.

Buy-the-Dip trigger: $65.50

BUY the 2012 January $70 calls (MON1221A70)

- or -

BUY the 2013 January $75 calls (MON1319A75)

Originally listed on the Watch List: 01/08/11


Newfield Exploration Co. - NFX - close: 72.14

02/26 update: I am removing NFX from the watch list. The stock is seeing a huge bounce. Shares are unlikely to hit our trigger any time soon and I don't want to chase it at current levels.

Originally listed on the Watch List: 01/15/11


Teva Pharmaceuticals - TEVA - close: 50.46

02/26 update: TEVA is inching closer and closer to our buy-the-dip entry point at $49.00. I would keep our position size small to limit our risk. If triggered we'll use a stop loss at $46.90.

Buy-the-Dip trigger: $49.00

BUY the 2012 January $55 calls (TEVA1221A55)

- or -

BUY the 2013 January $60 calls (TEVA1319A60)

Originally listed on the Watch List: 01/29/11


UnitedHealth Group, Inc. - UNH - close: 42.84

02/26 update: I am removing UNH from our watch list. I'm still interested in trading it but it could take a while before shares consolidate toward support near $38.00. Readers will want to keep it on their radar screen. The stock might have just produced a bearish double top pattern. Our trigger to open positions was at $38.50.

Originally listed on the Watch List: 01/15/11