The tone of trading has improved significantly in the past week. The DJIA has broken out to new multi-year highs and the S&P 500 and the NASDAQ Composite may not be far behind. However, we are still in the very middle of earnings season. Anything can happen and individual stocks could see huge volatility as investors react to earnings news. Plus, this week we'll hear from the Federal Reserve and see the very first post-FOMC meeting press conference with Ben Bernanke. Thus, while I am positive on the markets I am cautious here. We are not adding any new watch list candidates tonight.
I am adding some stocks to my radar screen. These might have potential but I'm not ready to list them yet. They are: ORCL, DOW, PCX, UNH and ZMH. Last week's radar screen candidates were: KO, PEP, MCD, and UN.
New Watch List Entries
None, no new watch list candidates
Active Watch List Candidates
BA - Boeing Co.
HSY - Hershey Co.
T - AT&T Inc.
Active Watch List Candidates:
Boeing Co. - BA - close: 75.44
Shares of BA are turning things around. The stock is up six days in a row, which would suggest investors are no longer worried about fracturing airplane hulls or budget cuts in the U.S. defense budget. BA is nearing its 2010 highs near $76.00. Currently our plan is to buy calls when shares hit $76.50. However we want to keep our position size very small to limit our risk. Furthermore, cautious traders may want to wait to see how the market reacts to BA's earnings report before considering new positions. The company is due to report earnings on April 27th, before the opening bell.
We'll use a stop loss at $69.75. Our long-term targets are $89 and $104.
Breakout trigger: $76.50 <--- Small Positions Only!
BUY the 2012 Jan. $80 call (BA1221A80)
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BUY the 2013 Jan. $90 call (BA1319A90)
Chart of BA:
Originally listed on the Watch List: 03/26/11
Hershey Co. - HSY - close: 56.75
HSY's current rally is almost three months old. Shares have stalled near $57 as investors wait for the company's earnings report. Odds are pretty good that HSY could see some profit taking after its earnings announcement no matter how good the results are just because the stock is so overbought at the moment. HSY announces on April 26th prior to the opening bell.
At the moment we have a buy-the-dip entry point at $53.00 and a stop loss at $49.45.
Our long-term targets are $60 and $64.
Buy-the-Dip trigger: $53.00
BUY the 2012 $55 calls (HSY1221A55)
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BUY the 2013 $55 calls (HSY1319A55)
Originally listed on the Watch List: 04/02/11
AT&T - T - close: 30.68
Earnings for AT&T have come and gone and there was no profit taking. The company reported a profit of 57 cents a share with revenues of $31.25 billion. Wireless subscribers rose to 97.5 million. Overall the report was pretty much in-line with expectations.
Shares of AT&T remain stuck in their $30-31 trading range.
More aggressive traders may want to consider bullish positions now or consider a breakout entry point above $31.00. I remain a little bit cautious here, especially with the S&P 500 still trading under resistance. I'm leaving our trigger at $29.25 for the moment.
If we are triggered at $29.25 we'll use a stop at $26.95.
Our long-term target is the $36-40 zone.
Buy-the-Dip trigger: $29.25
BUY the 2012 January $30.00 call (T1221A30) current ask $2.07
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BUY the 2013 January $30.00 call (T1319A30) current ask $2.70
Originally listed on the Watch List: 04/09/11