New Watch List Entries

DVN - Devon Energy

MSI - Motorola Solutions

ONNN - ON Semiconductor

PEP - Pepsico Inc


Active Watch List Candidates

APC - Anadarko Petroleum

FDO - Family Dollar Stores

MCD - McDonald's Corp

MMM - 3M Co.

NVDA - NVIDIA Corp

SHW - Sherwin-Williams

TJX - TJX Cos. Inc.

WMT - Wal-Mart Stores Inc.

XOM - Exxon Mobil


Dropped Watch List Entries

USO has been removed.



New Watch List Candidates:


Devon Energy - DVN - close: 66.56

Company Info

DVN is a large oil and gas company that appears to be forming a bottom. If you study the daily chart you'll see that shares are forming an inverse head-and-shoulders pattern. The stock has resistance near $70. I am suggesting we wait for DVN to close over $70.25 and we'll buy calls the next day with a stop loss at $62.50. More conservative traders may want to wait for DVN to close over its simple 200-dma before considering bullish positions (if you do, adjust your stop loss higher). Our long-term target is $89.

FYI: 2014 calls are also available.

Wait for DVN to close over $70.25, buy calls the next day, stop 62.50

BUY the 2013 Jan $80 call (DVN1319A80)

Chart of DVN:

Originally listed on the Watch List: 12/10/11


Motorola Solutions, Inc. - MSI - close: 47.02

Company Info

This communication equipment company is climbing back towards major resistance at the $48.00 level. A breakout here would be new multi-year highs. I am suggesting we wait for MSI to close above $48.25 and then buy calls the next day with a stop loss at $43.75. Our long-term target is $64.50. The Point & Figure chart is bullish with a $58 target.

FYI: 2014 calls are also available.

Wait for MSI to close over $48.25, buy calls the next day, stop 43.75

BUY the 2013 Jan $55 call (MSI1319A55)

Chart of MSI:

Originally listed on the Watch List: 12/10/11


ON Semiconductor Corp. - ONNN - close: 8.14

Company Info

ONNN is a semiconductor stock that has been building a bottom in the $6.50-8.50 range for months. A breakout from this trading range could portend a new leg higher. I am suggesting we wait for ONNN to close over $8.50 and then buy calls the next day with a stop loss at $7.70. More conservative traders may want to wait for ONNN to close over its simple 200-dma instead. Our long-term target is $11.45. I would keep our position size small.

Wait for ONNN to close over $8.50, buy calls the next day, stop 7.70

BUY the 2013 Jan $10 call (ONNN1319A10)

(small positions)

Chart of ONNN:

Originally listed on the Watch List: 12/10/11


Pepsico, Inc. - PEP - close: 65.19

Company Info

PEP has spent four months building a base under resistance in the $65-66 zone. Now shares are on the verge of breaking out past technical resistance at its 200-dma and its multi-month trendline of lower highs.

I am suggesting we wait for PEP to close over $66.25 and then launch positions the next day with a stop loss at $62.75. Our target is $71.75. I would keep our position size small to limit our risk. FYI: The Point & Figure chart for PEP is bullish with an $81 target.

Wait for PEP to close over $66.25, buy calls the next day, stop 62.75

BUY the 2013 Jan $70 call (PEP1319A70)

(small positions)

Chart of PEP:

Originally listed on the Watch List: 12/10/11

Active Watch List Candidates:



Anadarko Petroleum - APC - close: 80.25

Comments:
12/10 update: There is little change in APC. The stock is still chopping around in a very wide range. If the market rallies then look for APC to run toward resistance near $85.00. I don't see any changes from my prior comments. We have two different entry points.

In summary, if APC closes over $85.25 then we'll buy calls the next day with a stop loss at $77.00 and we want to use the 2013 Jan $110 calls. On the other hand if APC hits $62.00 (on an intraday basis) then we'll buy calls at $62.00 with a stop loss at $56.50 and we'll use the 2013 $90 calls.

Wait for a close over $85.25 (stop loss $77.00)

BUY the 2013 Jan $110 call (APC1319A110)

- or -

buy calls on a dip at $62.00 (stop loss $56.50)

buy the 2013 Jan $90 call (APC1319A90)

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


Activition/Blizzard, Inc. - ATVI - close: 12.24

Comments:
12/10 update: ATVI closed virtually unchanged for the week. As expected the stock did see a dip toward $12.00. Aggressive traders might want to buy this bounce with a tight stop loss. I don't see any other changes from my prior comments.

I am still suggesting readers wait for a much bigger move higher. We're listing a trigger to wait for ATVI to close over $13.00 and then initiate call positions the next morning with a stop at $11.90 (new). Our long-term target is $15.75.

Wait for a close over $13.00

BUY the 2013 Jan $15 call (ATVI1319A15)

Originally listed on the Watch List: 11/19/11


Family Dollar Stores Inc. - FDO - close: 57.86

Comments:
12/10 update: We are still waiting for FDO to dip toward support in the $55-54 area. Currently the newsletter is suggesting investors wait for a dip and buy calls at $54.50. If triggered we'll use a stop loss at $51.25. I am suggesting we keep our position size small. Our long-term target is $69.50.

FYI: An alternative entry point would be a close over resistance at the $60.00 level.

Buy-the-Dip trigger: $54.50, stop loss 51.25

BUY the 2013 Jan $60 call (FDO1319A60)

12/03/11 Adjusted trigger to buy the dip at $54.50 and stop loss to $51.25, they were 53.00 and $49.45.

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


McDonald's Corp. - MCD - close: 98.03

Comments:
12/10 update: Investors are still loving large cap, dividend names. MCD's dividend isn't that high but it's still near 3% and the stock just keeps on inching higher. MCD hit new all-time highs on Friday. The $100 level is most likely round-number, psychological resistance so we don't want to buy calls now.

We'll leave our buy-the-dip entry point at $90.00 (stop loss @ 86.45). Our long-term target is $108.00. More aggressive traders might want to buy a dip near the 50-dma instead.

Buy-the-Dip trigger: $90.00

BUY the 2013 Jan $100 call (MCD1319A100)

11/26/11 adjusted stop loss to $86.45

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


3M Co. - MMM - close: 82.20

Comments:
12/10 update: MMM spent another week consolidating sideways under resistance in the $83-84 zone. The stock also has overhead resistance in the form of some long-term moving averages.

I am suggesting we buy calls after MMM closes above $85.00. We'll use a stop loss at $78.90. Our long-term target is $97.00.

We are listing the 2013 calls. MMM does have 2014s available.

Wait for Close over $85.00, then buy calls, stop: 78.90

BUY the 2013 Jan $95 call (MMM1319A95)

Originally listed on the Watch List: 12/03/11


NVIDIA Corp. - NVDA - close: 14.90

Comments:
12/10 update: NVDA saw a dip to its trendline of higher lows on Friday. Short-term traders might want to buy Friday's intraday bounce with a stop under Friday's low. Given our long-term perspective we still want to wait for NVDA to breakout over major resistance near $16.00.

Currently the plan is to buy calls after NVDA closes above $16.25. We will adjust our stop loss higher to $14.25. Our long-term target is $22.50.

NOTE: Due to NVDA's volatility this is an aggressive trade. We want to keep our position size small.

Wait for a close over $16.25 (small positions) stop 14.25

BUY the 2013 Jan. $20 call (NVDA1319A20)

12/03/11 Adjusted entry strategy to wait for close over $16.25.

Originally listed on the Watch List: 10/29/11


Sherwin-Williams Co. - SHW - close: 86.36

Comments:
12/10 update: Little has changed for SHW. The stock has spent over a week now consolidating sideways in the $85-87 zone. We are waiting for a breakout past resistance.

I am suggesting investors wait for SHW to close over $88.00 and then buy calls the next session with a stop loss at $82.45. If triggered our long-term target is $99.50. FYI: The Point & Figure chart for SHW is bullish with a $92 target.

Wait for SHW to close over $88.00, then buy calls, stop: 82.45

BUY the 2013 Jan $100 call (SHW1319A100)

Originally listed on the Watch List: 12/03/11


TJX Cos. Inc. - TJX - close: 63.25

Comments:
12/10 update: Hmm.... TJX continues to hold up pretty well. The stock is less than a dollar from all-time highs. Investors might want to consider a more aggressive entry point and buy calls on a dip near support at $60.00 and its 50-dma. At the moment I am still holding out for a pull back toward its long-term trend of support. Our plan calls for buying calls on a dip at $56.25. We will leave it like this for another week or two and then re-evaluate.

Buy-the-Dip trigger: $56.25, stop loss 52.40

BUY the 2013 Jan $60 call (TJX1319A60)

11/12/11 new trigger @ 56.25, new stop 52.40
10/29/11 adjusted trigger to $55.00, stop to $51.75
10/15/11 adjusted entry point to buy the dip at $54.00, stop at $51.45

Originally listed on the Watch List: 09/24/11


U.S. Oil ETF - USO - close: 38.50

Comments:
12/10 update: We are dropping the USO as a long-term candidate. We remain long-term bullish on oil but an ETF that has to constantly roll forward its futures contracts could be frustrating for investors as the process has a negative impact on the ETF's share price.

NOTE: We're adding DVN as new candidates tonight. Investors might want to look at the XOP or the XLE as an alternative to the USO.

Trade did not open.

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


Wal-Mart Stores Inc. - WMT - close: 58.32

Comments:
12/10 update: WMT is little changed from a week ago. This is a slow-moving stock. It could take weeks before we see WMT provide an appropriate entry point and months for the stock to actually move high enough for us. Trading WMT LEAPS is going to require some patience.

Earlier Comments:
There is support near $56.00 but I am suggesting we wait for a dip toward stronger support near $54.00. We'll use an entry point at $54.50. Our long-term target is $63.50.

Buy-the-Dip trigger: $54.50, stop loss @ 51.75

BUY the 2013 Jan $60 call (WMT1319A60)

- or -

BUY the 2014 Jan $60 call (WMT1418A60)

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


Exxon Mobil -XOM - close: 81.34

Comments:
12/10 update: XOM is edging closer to resistance at the $82.00 level. We could see shares produce an entry point this week. The plan is to buy calls after we see XOM close above $82.00.

There is potential resistance at $85 and $87.50 but our long-term target is $94.00.

Wait for XOM to close over $82.00, then buy calls, stop 76.40

BUY the 2013 Jan $90 call (XOM1319A90)

- or -

BUY the 2014 Jan $95 call (XOM1418A95)

Originally listed on the Watch List: 12/03/11