Editor's Note:

In addition to our watch list candidates, readers may want to keep an eye on the following stocks. These are on my radar screen as possible candidates in the next few weeks if not sooner.

On my radar: CCJ, INTC, SCCO, DDD, NWSA, WFR, JDSU, SCHW, AIG, TCK, ADTN, PSS, NAV, XLK, CREE, C, LTD, NVDA, FWLT

I'd keep a close eye on SCHW, AIG, LTD, NVDA, and FWLT.



New Watch List Entries

AKAM - Akamai Technologies

CIEN - Ciena Corp


Active Watch List Candidates

ADM - Archer-Daniel-Midland Co.

MCD - McDonald's Corp

MSI - Motorola Solutions

V - Visa Inc.

YUM - Yum,! Brands


Dropped Watch List Entries

FXI and LVS have been moved to new plays.

MRVL and RDC graduated to the active trade list.

SHAW has been removed from the watch list.



New Watch List Candidates:


Akamai Technologies - AKAM - close: 33.64

Company Info

AKAM is stair stepping higher. Shares outperformed on Friday and look poised to rally past its 2012 highs. Earnings are coming up on Feb. 8th. AKAM reports after the closing bell. Analysts are expecting 40 cents a share. Conservative traders do not want to open positions prior to the earnings report.

I am suggesting readers wait for AKAM to close over $35.25 and then buy calls the next day with a stop at $30.75. Our long-term target is $44.00. FYI: The P&F chart is bullish with a long-term $51 target.
NOTE: 2014 calls are also available.

Breakout trigger:
Wait for AKAM to close over $35.25 and buy calls the next day. Stop loss @ 30.75.

BUY the 2013 Jan $40 call (AKAM1319A40)

Chart of AKAM:

Originally listed on the Watch List: 02/04/12


Ciena Corp. - CIEN - close: 15.46

Company Info

It looks like CIEN has formed a bottom over the last several months with the $10-14 trading range. Now shares are coiling for a breakout past resistance near $16.00 and the simple 200-dma. I am suggesting we wait for CIEN to close over $16.25 and then buy calls the next day with a stop loss at $13.75. Our long-term target is $21.75. The Point & Figure chart is bullish with a $26 target. FYI: CIEN could benefit from a short squeeze. The most recent data listed short interest at 34% of the 75.9 million-share float.
NOTE: 2014 calls are also available.

Breakout trigger:
Wait for CIEN to close over $16.25 and buy calls the next day. Stop loss $13.75.

BUY the 2013 Jan $17.50 call (CIEN1319A17.5)

Chart of CIEN:

Originally listed on the Watch List: 02/04/12


Active Watch List Candidates:



Archer-Daniels-Midland Company - ADM - close: 29.55

Comments:
02/04/12 update: ADM sold off following its earnings miss last week. Shares have started to recover and the stock closed back above its 200-dma on Friday. I'm suggesting we give ADM couple of more weeks to see if the stock can breakout past resistance.

We want to open small bullish positions if ADM can close over $31.00. We'll use a stop loss at $28.40. Our long-term target is $37.75.

Breakout trigger:
Wait for ADM to close over $31.00 and then buy calls the next day with a stop loss at $28.40.

BUY the 2013 JAN $35 CALL (ADM1319A35)

FYI: 2014 calls are also available.

Originally listed on the Watch List: 01/28/12


McDonald's Corp. - MCD - close: 100.01

Comments:
02/04/12 update: Is that all the profit taking MCD is going to see? Shares dipped toward $98 following its earnings report two weeks ago. Since then the stock has consolidated along its simple 50-dma for a few days. Friday pushed MCD back above the $100 mark. If I were a short-term trader then Friday's move looks like a potential entry point with a stop under $98.00. However, the market is growing more and more overbought and could see a correction sooner rather than later. We will wait for a bigger pull back in MCD.

I am leaving our buy-the-dip trigger at $95.50. More conservative investors may want to wait for MCD to hit the rising 100-dma (approaching $94) before considering new positions. Our long-term target is $108.00.

Buy-the-Dip trigger: $95.50, stop 89.50

BUY the 2013 Jan $100 call (MCD1319A100)

12/24/11 adjusted entry point to $95.50, stop loss to $89.50
12/17/11 adjusted entry point to $91.50, stop loss to $87.25
11/26/11 adjusted stop loss to $86.45

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


Motorola Solutions, Inc. - MSI - close: 47.13

Comments:
02/04/12 update: MSI continues to rebound following the sell-off two weeks ago. The improvement is encouraging so I'm not ready to give up just yet. Wait for the breakout past resistance.

Currently our plan is to open bullish positions when MSI closes over $48.25 with a stop loss at $43.95.

Our long-term target is $64.50. FYI: 2014 calls are also available.

Wait for MSI to close over $48.25, buy calls the next day, stop 43.95

BUY the 2013 Jan $55 call (MSI1319A55)

02/04/12 if triggered, use a stop loss at $43.95
01/28/12 MSI underperformed as investors sold the stock following its earnings report. If MSI doesn't improve this week we'll drop it as a candidate.

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


Shaw Group Inc. - SHAW - close: 29.34

Comments:
02/04/12 update: SHAW has spent nearly a month churning sideways in the $27-29 zone. Friday's market-wide rally has pushed shares to new six-month highs. Aggressive traders might want to consider new positions now but I still see potential resistance near $30.00.

I am going to drop SHAW from the watch list for now. We'll keep an eye on it for a breakout past $30.00 or a correction back toward the 50-dma.

Our trade did not open.

Originally listed on the Watch List: 01/07/12


Visa, Inc. - V - close: 107.03

Comments:
02/04/12 update: The recent earnings results from MasterCard (MA) has fueled a big rally in the credit-card related stocks. Visa soared to new highs but we don't want to chase it here. The stock could see some profit taking after it reports earnings on Feb. 8th this week.

We will adjust our buy-the-dip trigger to $97.00 and move our stop loss to $92.00. More aggressive traders may want to consider new positions on a bounce near $100. Our long-term target is $119.00.

Buy-the-Dip trigger: $97.00, with a stop loss @ 92.00

BUY the 2013 Jan $110 call (V1319A110)

02/04/12 adjusted buy-the-dip trigger to $97.00, stop 92.00
01/21/12 adjusted buy-the-dip trigger down to $95.50, stop 89.40
01/07/12 Adjusted entry point strategy to buy a dip at $96.00 with a stop at $89.75.

Originally listed on the Watch List: 12/24/11


Yum! Brands, Inc. - YUM - close: 63.84

Comments:
02/04/12 update: YUM continues to grow more and more overbought. The stock is essentially up 10 weeks in a row. I strongly suspect that YUM could see some profit taking when it reports earnings on Feb. 6th. I am adjusting our buy-the-dip entry point to $58.50 with a stop loss at $54.75. Our long-term target is $69.50.

FYI: the bullish P&F chart target has risen to $99.

Buy-the-Dip trigger: $58.50, stop loss $54.75

BUY the 2013 Jan $60 call (YUM1319A60)

- or -

BUY the 2013 Jan $65 call (YUM1418A65)

02/04/12 adjusted buy-the-dip trigger to $58.50
01/14/12 adjusted entry point strategy to use a trigger at $57.50 and a stop at $53.75

Originally listed on the Watch List: 01/07/12