New Watch List Entries

BMC - BMC Software

RRC - Range Resources

XOP - S&P Oil & Gas ETF


Active Watch List Candidates

ESV - Ensco Plc.

KO - Coca-Cola Co.

MMR - McMoRan Exploration


Dropped Watch List Entries

CLF, CRS, EMC, EMN, and V all graduated to the play list.



New Watch List Candidates:


BMC Software - BMC- close: 37.48

Company Info

Technology stocks have been getting hammered. Worries about a slowing economy and a recent downgrade for IT spending has not helped matters. Shares of BMC have already erased their oversold bounce and closed at new multi-month lows on Friday. While tech stocks have accelerated lower they could see the biggest gains when the market bounces.

Right now BMC is headed for long-term support in the $35-34 area. I am suggesting we launch small bullish positions on a dip at $35.00 with a tight stop loss at $33.75.

Buy-the-Dip trigger: $35.00

BUY the 2012 Jan $40 call (BMC1221A40)

- or -

BUY the 2013 Jan $40 call (BMC1319A40)

Chart of BMC

Originally listed on the Watch List: 08/20/11


Range Resources Corp. - RRC - close: 57.45

Company Info

RRC is an independent oil and gas company. The stock has weathered the market storm reasonably well. That's not to say the last four weeks haven't been volatile but RRC has not seen the same breakdown elsewhere in the sector.

If the market continues to sink then RRC could retest support in the $51-50 zone. I am suggesting we launch small bullish positions on a dip at $52.00 with a stop loss at $49.50.

Buy-the-Dip trigger: $52.00

BUY the 2012 Jan $60 call (RRC1221A60)

- or -

BUY the 2013 Jan $60 call (RRC1319A60)

Chart of RRC:

Originally listed on the Watch List: 08/20/11


S&P Oil & Gas ETF - XOP - close: 48.68

Company Info

The XOP is an oil and gas ETF with 76 components. The biggest components are stocks like HK, GPOR, WNR, HNR, CVI, and COG. The group was murdered back in early August and the correction from its July highs has hit -24%. There is a good chance this sell-off is not over yet and the XOP could drop toward support in the $45-44 zone. I want to be ready if it does.

I am suggesting small bullish positions if XOP hits $45.00 with a stop loss at $43.40. If the $44 level doesn't hold then the XOP could be headed for the $37.50 area.

Buy-the-Dip trigger: $45.00

BUY the 2012 Jan. $50 call (XOP1221A50)

- or -

BUY the 2013 Jan. $60 call (XOP1319A60)

Chart of XOP:

Originally listed on the Watch List: 08/20/11


Active Watch List Candidates:



Ensco Plc. - ESV - close: 42.32

08/20 update: Stocks are accelerating lower yet again. ESV is dropping faster than I expected. Shares look poised to retest support near $40.00. I am adjusting our buy-the-dip entry point to $40.00 and moving our stop loss to $38.40. If the $40 level breaks down as support then ESV could be facing a drop toward the $35-33 zone. We do want to keep our position size small to limit our risk.

buy-the-dip at $40.00

BUY the 2012 Jan $45 call (ESV1221A45)

- or -

BUY the 2013 Jan $45 call (ESV1319A45) - new strike

Originally listed on the Watch List: 07/30/11


Coca-Cola Co - KO - close: 67.10

08/20 update: KO was showing relative strength the first half of the week. By Friday's closing bell the stock was only down 4 cents for the week. There is still a good chance KO will contract back into the $66-64 zone. Cautious traders may want to wait for a dip closer to $64. I am suggesting a buy-the-dip entry point at $65.00 with a stop loss at $63.40.

Keep positions small.

Buy-the-Dip trigger: $65.00

BUY the 2012 Jan. $70 call (KO1221A70)

- or -

BUY the 2013 Jan. $70 call (KO1319A70)

Originally listed on the Watch List: 08/13/11


McMoRan Exploration Co. - MMR - close: 11.41

08/20 update: The rebound failed at $14.00 and MMR lost -14.7% by the end of the week. Shares set a new multi-month closing low on Friday. I am expecting MMR will retest support near $10.00. We're going to tweak our entry point and lower the buy-the-dip trigger to $10.25 with a stop loss at $9.40.

Buy the dip at $10.25

BUY the 2012 Feb $12 call (MMR1218B12) -Februarys-

- or -

BUY the 2013 Jan $15 call (MMR1319A15)

Originally listed on the Watch List: 07/23/11