New Watch List Entries

CL - Colgate-Palmolive

LTD - Limited Brands


Active Watch List Candidates

BRK.B - Berkshire Hathaway

CDE - Coeur d'Alene Mines Corp

CVX - Chevron Corp

F - Ford Motor Co.

MCD - McDonald's Corp

TIVO - TiVo Inc.


Dropped Watch List Entries

NVDA was removed as a watch list candidate.



New Watch List Candidates:


Colgate-Palmolive Co. - CL - close: 93.98

Company Info

Shares of CL have been consolidating sideways within a larger up trend for months. Now the stock is on the verge of breaking out past major resistance in the $94-95 zone. We want to be ready when it happens.

I am suggesting we wait for CL to close over $95.25 and then buy calls the next day with a stop loss at $89.00. Our long-term target is $109.00.

Breakout trigger: Wait for CL to close over $95.25 and buy calls the next day (stop @ 89.00).

BUY the 2013 Jan $100 call (CL1319A100) current ask $2.56

- or -

BUY the 2014 Jan $100 call (CL1418A100) current ask $5.65

Chart of CL:

Originally listed on the Watch List: 03/10/12


Limited Brands, Inc. - LTD - close: 46.74

Company Info

Shares of LTD, much like the RLX retail index, are trading near all-time highs. The stock's ability to hold support near the $45.00 level is positive. I'm almost tempted to buy calls on a breakout past $47.00. However, I am not convinced the market's correction is over yet. I am proposing a buy-the-dip strategy here in case the market does see a stronger correction.

Let's plan on buying calls if LTD can dip to $42.50 and we'll use a stop loss at $39.50. Our long-term target is $54.50.

Buy-the-Dip trigger: $42.50 (stop loss @ 39.50)

BUY the 2013 Jan $45 call (LTD1319A45)

Chart of LTD:

Originally listed on the Watch List: 03/10/12


Active Watch List Candidates:



Berkshire Hathaway (B shares) - BRK.B - close: 79.41

Comments:
03/10/12 update: Shares of BRK.B did not see much profit taking last Tuesday. The stock has continue to consolidate sideways and Friday saw a breakout over some short-term moving averages. If the market cooperates we could see BRK.B challenging resistance near $80 soon.

I am suggesting we launch small bullish positions if BRK.B can close over $80.75. If triggered we'll use a stop loss at $77.25. Our long-term target is the $94-98 range.

Breakout trigger:
Wait for a close over $80.75, buy calls the next day.

(Small Positions) use a stop loss at $77.25.

BUY the 2013 Jan $85 call (BRKB1319A85)

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


Coeur d'Alene Mines Corp. - CDE - close: 26.33

Comments:
03/10/12 update: Gold and silver prices have been volatile as they react to big moves in the currency markets. This volatility in silver is being reflected in shares of CDE. Shares are flirting with a significant breakdown under most of its major moving averages this past week. If we do not see CDE show some improvement this week then I'll drop it as a candidate. Currently we are waiting for a breakout over $30.00. The plan is to wait for CDE to close over $30.50 and then buy calls the next day.

If our trade is opened we'll start with a stop loss at $27.25. Our long-term target is $37.00.

Breakout trigger:
Wait for a close over $30.50 and buy calls the next day.

BUY the 2013 Jan $35 call (CDE1319A35)

03/03/12 adjusted trigger to close over $30.50

Originally listed on the Watch List: 02/25/12


Chevron Corp. - CVX - close: 109.57

Comments:
03/10/12 update: If the dollar reversed lower it should help fuel new gains in oil, which should benefit the oil stocks. CVX is still hovering under major resistance near the $111 level.

I don't see any changes from my prior comments. The early 2012 high was $110.99. I am suggesting we wait for CVX to close over $111.00 and then buy calls the next day with a stop loss at $105.75 (under the 50-dma). Our long-term target is $125.00. FYI: the Point & Figure chart for CVX is bullish with a $133 target.

Breakout trigger:
Wait for CVX to close over $111.00 and buy calls the next day.

BUY the 2013 Jan $120 call (CVX1319A120)

- or -

BUY the 2014 Jan $120 call (CVX1418A120

Originally listed on the Watch List: 02/25/12


Ford Motor Co. - F - close: $12.58

Comments:
03/10/12 update: Shares of Ford are still consolidating sideways in the $12.00-13.00 zone. We are waiting for a breakout past resistance near $13.00.

I am suggesting we wait for Ford to close over $13.25 and then buy calls the next day with a stop loss at $11.75. Our long-term target is $16.50.

Breakout trigger: Wait for Ford to close over $13.25, buy calls the next day.

BUY the 2013 Jan $12.50 call (F1319A12.5)

- or -

BUY the 2014 Jan $15 call (F1418A15)

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


McDonald's Corp. - MCD - close: 96.84

Comments:
03/10/12 update: After several weeks of consolidating sideways at record highs MCD finally broke down when they announced February global same-store sales growth of +7.5%. Yes, they are growing at more than +7% and investors sold the news. There are plenty of companies that would kill for that kind of improvement. February's +7.5% number was up from January's +6.7% pace but below analysts expectations in the 7.7%-to-8.2% range. The biggest disappointment was a slowdown in the Asia Pacific, Middle East, and African operations.

The intraday low this past week was $96.46 so our trade is not open yet. We have a trigger to buy calls at $95.50. More conservative traders may want to use a trigger closer to $94.00 or even $92.00 if we see the market's major indices correct lower. I am still willing to buy the dip at $95.50 with a stop loss at $89.50. Instead of buying the dip readers may want to wait and buy the bounce instead.

Last week I cautioned readers to watch the 100-dma and sure enough that's where MCD is trading.

If triggered 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


NVIDIA Corp. - NVDA - close: 14.82

Comments:
03/10/12 update: Graphics chip maker NVDA is still correcting lower. Shares spent most of the week churning sideways in the $14.50-15.00 zone. Aggressive traders might want to consider small bullish positions on a rally past $15.50. Please note that the newsletter is giving up on NVDA, at least for now. We wanted to buy a breakout over $17.00 but that may not happen for a long time. I am dropping NVDA as a candidate.

Our trade never opened.

03/10/12 removed NVDA from the watch list.

Originally listed on the Watch List: 02/18/12


TiVo Inc. - TIVO - close: 11.28

Comments:
03/10/12 update: TIVO saw a dip toward its 50-dma and bounced. Looking at the big picture on the weekly chart this pullback in TIVO still looks like an entry point for bullish positions. However, I am suggesting we wait for a strong rebound. We will adjust our entry point. Instead of waiting for a close over $12.25 we'll wait for a close over $11.75 instead and then buy calls the next day.

We'll use a stop loss at $10.75. Our long-term target is $16.00. FYI: The Point & Figure chart is bullish with a long-term $18.50 target.

Breakout trigger: Wait for TIVO to close over $11.75, buy calls the next day. Stop loss at $10.75.

BUY the 2013 Jan $12.50 call (TIVO1319A12.5)

03/10/12 adjust entry strategy to buy calls after TIVO closes over $11.75 with a stop at $10.75.

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