New Watch List Entries

HSY - Hershey Co.

SWN - Southwestern Energy Co.


Active Watch List Candidates

BA - Boeing Co.

CACI - CACI International

Costco Wholesale - COST

JRCC - James River Coal Co.

PBR - Petrobras


Dropped Watch List Entries

CACI was promoted to the active play list.


New Watch List Candidates:

Hershey Co. - HSY - close: 54.30

The threat of food inflation, higher commodity costs, and rising violence in the African nation of the Ivory Coast, the world's largest producer of cocao, has not stopped the rally in shares of HSY. The country just announced they were raising prices this past week and reaffirmed their 2011 outlook. Considering all the outside influences HSY's stock looks pretty healthy. It just broke out past major resistance near $52 a few weeks ago. I am suggesting we open small bullish positions on a dip back to $52.25. If triggered we'll use a stop loss at $48.40, under the 200-dma. Our long-term targets are $60 and $64. FYI: The Point & Figure chart for HSY is bullish with a $64 target.

Company Info

Buy-the-Dip trigger: $52.25

BUY the 2012 $55 calls (HSY1221A55)

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BUY the 2013 $55 calls (HSY1319A55)

Chart of HSY:

Originally listed on the Watch List: 04/02/11


Southwestern Energy Co. - SWN - close: 42.87

SWN is an oil and gas company focused on production here in the U.S. This past month the stock produced a huge rally, fueled by strong volume, and broke out through resistance at the $40 level. We don't want to chase it but a dip back toward $40 could be a new entry point. I am suggesting we buy call LEAPS on a dip at $40.50. If triggered we'll use a stop loss at $36.75. Our long-term target is the $50-52.50 zone. FYI: The P&F chart is bullish with a $51 target.

Company Info

Buy-the-Dip trigger: $40.50

BUY the 2012 $45 calls (SWN1221A45)

- or -

BUY the 2013 $45 calls (SWN1319A45)

Chart of SWN:

Originally listed on the Watch List: 04/02/11


Active Watch List Candidates:


Boeing Co. - BA - close: 74.01

04/02 update: BA's bounce from the mid-March lows has run from support near $68 and its 200-dma to resistance near $74.00. We want to see a breakout to new highs. Last April saw a spike to $76.00. I am suggesting a trigger to buy calls at $76.50. This is an adjustment from last week, which said $76.00. We'll use a stop loss at $69.75. Our long-term targets are $89 and $104.

Breakout trigger: $76.50 <--- New Trigger

BUY the 2012 Jan. $80 call (BA1221A80)

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BUY the 2013 Jan. $90 call (BA1319A90)

Originally listed on the Watch List: 03/26/11


CACI International - CACI - close: 62.33

04/02 update: I am promoting CACI to the active trade list. Look for details in tonight's "new plays" section.

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


Costco Wholesale - COST - close: 74.25

04/02 update: The action in COST is improving. Shares broke through technical resistance at its 30 and 50-dma last week. The stock is headed for its 2011 highs near $75 soon. Our plan is to buy calls when COST hits $76.00. The all-time high is just under $75.50. If triggered we'll start with a stop at $69.95.

Buy-the-breakout trigger: $76.00

BUY the 2012 January $80 calls (COST1221A80)

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BUY the 2013 January $85 calls (COST1319A85)

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


James River Coal Co. - JRCC - close: 25.14

04/02 update: After six days of consolidating sideways JRCC displayed some relative strength on Friday with a +4% gain. This might be a short-term bullish entry point but I wouldn't want to launch long-term LEAPS positions here. I'm suggesting we wait for a dip and use a trigger at $22.50 as our entry point.

If triggered at $22.50 we'll use a stop loss at $19.90. Our long-term target is $29.50. We do want to keep our position size small to limit our risk.

Buy-the-Dip trigger: $22.50 <--- Updated Trigger

BUY the 2012 January $25 calls (JRCC1221A25)

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


Petroleo Brasileiro (a.k.a. Petrobras) - PBR - close: 41.41

04/02 update: PBR has climbed to new two-week highs. More aggressive traders may want to consider positions now. I'd rather wait. There is a chance that oil and oil stocks will correct when the current futures contract expires. I'm suggesting we buy a dip at $39.00. If the play is opened we'll use a stop loss at $35.75, just under its 200-dma. I would keep our position size smaller because PBR can be a volatile stock. Our long-term target is $53.00. Buy-the-Dip trigger: $39.00

BUY the 2012 Jan. $40 calls (PBR1221A40) current ask $4.70

- or -

BUY the 2013 Jan. $45 calls (PBR1319A45) current ask $4.70

Originally listed on the Watch List: 03/26/11