New Watch List Entries

WLP - Wellpoint Inc.


Active Watch List Candidates

AGN - Allergan Inc.

AXP - American Express Co

BCR - C.R.Bard Inc.

HSY - Hershey Co.

MCD - McDonald's Corp.

PEP - Pepsico

T - AT&T Inc.


Dropped Watch List Entries

None.



New Watch List Candidates:


Wellpoint Inc - WLP - close: 77.33

Company Info

Healthcare names have been some of the market's best performers in the second quarter. WLP is one of them and the long-term trend for this stock is still very bullish. Yet even healthcare stocks will likely collapse if the market's major indices breakdown under key support levels.

We want to be ready if the market breaks down and pulls WLP down with it. On a short-term basis WLP's bounce just failed at resistance near $80.00. The stock is testing support near $75.00. I suspect that a market drop could pull WLP down toward the next level of support at $70.00. I am suggesting a buy-the-dip trigger at $70.50 with a wide (aggressive) stop loss at $64.75. More conservative traders may want to wait and watch for a dip toward the simple 200-dma (currently near $65).

If we do get triggered we want to keep our position size small to limit our risk.

Buy-the-Dip trigger: $70.50

BUY the 2012 Jan. $75 call (WLP1221A75)

- or -

BUY the 2013 Jan. $80 call (WLP1319A80)

Chart of WLP:

Originally listed on the Watch List: 06/25/11


Active Watch List Candidates:



Allergan Inc. - AGN - close: 80.87

06/25 update: The rally from the $79.00 level from two weeks ago is reversing. AGN is testing support near $80 and the 50-dma again. We are still waiting for a correction back to significant support near $75.00. We have a buy-the-dip trigger at $75.50 and a stop loss at $72.00. Our long-term targets are $85 and $97.50.

Buy-the-Dip trigger: $75.50

BUY the 2012 Jan $80 call (AGN1221A80)

- or -

BUY the 2013 Jan $85 call (AGN1319A85)

Originally listed on the Watch List: 06/04/11


American Express Co. - AXP - close: 48.34

06/25 update: AXP's bounce has failed near round-number resistance at $50.00. Shares look headed lower toward support near $47 and the 100-dma. I am actually expecting a dip toward the 200-dma so we'll keep our buy the dip entry point at $45.50 for now. If triggered we'll use a stop loss at $42.90. Our long-term targets are $55 and $65.

Buy-the-Dip trigger: $45.50

BUY the 2012 Jan $50 call (AXP1221A50)

- or -

BUY the 2013 Jan $50 call (AXP1319A50)

Originally listed on the Watch List: 05/21/11


C.R.Bard Inc. - BCR - close: 107.52 change: -1.28

06/25 update: We have been expecting a correction in BCR and it looks like that correction has begun. Nimble traders willing to make short-term traders may want to buy puts right here and target a drop toward the 100-dma near $102.50. I am anticipating a correction toward round-number support near $100 so we have a buy-the-dip entry point at $101.00 with a stop loss at $97.75.

Buy-the-Dip trigger: $101.00

BUY the 2012 Jan. $105 (BCR1221A105)

Originally listed on the Watch List: 06/11/11


Hershey Co. - HSY - close: 55.94

06/25 update: In this market investors are turning to defensive names and HSY managed another gain for the week. The bounce from $55.00 almost looks like a new bullish entry point but I'm still concerned that the stock market's correction may not be over yet. Thus I'm reluctant to open new positions here. Currently our plan is to buy call LEAPS on a dip at $52.25. If triggered we'll use a stop loss at $48.75. Our long-term targets are $60 and $64.

Buy-the-Dip trigger: $52.25

BUY the 2012 $55 calls (HSY1221A55)

- or -

BUY the 2013 $55 calls (HSY1319A55)

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


McDonald's Corp. - MCD - close: 81.84

06/25 update: MCD's rally stalled at resistance near $83.00. Now shares appear to have formed a bearish double top but there hasn't been any follow through yet. MCD should have support near $80 and near $78. Currently our plan is to launch positions at $78.50. If triggered we'll use a stop loss at $75.75, under the simple 200-dma. Our long-term targets are $89 and $99. The P&F chart is suggesting a $113 target.

Buy-the-Dip trigger: $78.50

BUY the 2012 Jan $80 call (MCD1221A80)

- or -

BUY the 2013 Jan $85 call (MCD1319A85)

Originally listed on the Watch List: 05/21/11


Pepsico, Inc. - PEP - close: $68.45

06/25 update: PEP is still slowly correcting lower. Shares are currently flirting with a breakdown under support near $68.00. I am expecting a dip toward the simple 200-dma, currently at $66.18. We will adjust our buy-the-dip trigger down to $66.50 and keep our stop loss, if triggered, at $64.75. Our targets are $75 and $79.

Buy-the-Dip trigger: $66.50

BUY the 2012 Jan. $70 call (PEP1221A70)

- or -

BUY the 2013 Jan. $70 call (PEP1319A70)

Originally listed on the Watch List: 05/14/11


AT&T - T - close: 30.44

06/25 update: AT&T continues to slip with a bearish trend of lower highs. The stock is poised to retest support near $30.00 soon. If the market breaks down I'm expecting shares of T to fall toward their 200-dma. We have a buy-the-dip entry point at $29.25 with a stop at $27.90. I would keep our position size small to limit our risk. Our long-term target is the $36-40 zone. AT&T doesn't move very fast so we will need lots of patience.

Buy-the-Dip trigger: $29.25 (small positions)

BUY the 2012 January $30.00 call (T1221A30)

- or -

BUY the 2013 January $30.00 call (T1319A30)

Originally listed on the Watch List: 04/09/11