New Watch List Entries

AXP - American Express

CREE - Cree, Inc.

GLD - Gold ETF

MSFT - Microsoft Corp.


Active Watch List Candidates

ATVI - Activision Blizzard

AIG - American Intl. Group

HAS - Hasbro

JDSU - JDS Uniphase

JPM - JPMorgan Chase

LTD - Limited Brands

MCD - McDonald's Corp

URBN - Urban Outfitters


Dropped Watch List Entries

Ford was removed from the watch list.



New Watch List Candidates:


American Express - AXP - close: 57.28

Company Info

The market looks poised to correct lower and AXP has created what looks like a top back in late March. Shares have been slowly drifting lower. I suspect the pullback will accelerate but we want to be ready to buy the dip.

I am suggesting small bullish positions if AXP dips to $52.50. We'll use a stop loss at $49.40. Our long-term target is $64.00.

Buy-the-Dip trigger: $52.50 (stop $49.40) (small positions)

BUY the 2013 Jan $55 call (AXP1319A55)

- or -

BUY the 2014 Jan $60 call (AXP1418A60)

Chart of AXP:

Originally listed on the Watch List: 04/14/12


Cree, Inc. - CREE - close: 31.55

Company Info

We've had our eye on CREE for several weeks. The stock has slowly been chewing its way through overhead resistance. Now it's close to breaking out past resistance in the $33-34 zone. I am suggesting we launch small bullish positions if CREE can close over $34.50. We'll buy calls the next morning with a stop loss at $29.45. Our long-term target is $44.50.

Breakout trigger: a close over $34.50 (small positions)

BUY the 2013 Jan $40 call (CREE1319A40)

Chart of CREE:

Originally listed on the Watch List: 04/14/12


Gold ETF - GLD - close: 160.85

Company Info

I have mentioned gold and the GLD in the market commentary recently. The GLD appears to be forming an inverse head-and-shoulders pattern. This also happens to line up with the long-term trend line of higher lows.

I am suggesting we wait for the GLD to close over $165.50 and we'll buy calls the next morning with a stop loss at $154.90. This is an aggressive entry point since the H&S pattern would not be complete until shares breakout past the $175 area. The U.S. dollar is likely to see a lot of movement over the next several months, which could cause volatility in gold. Therefore we want to keep our position size small. Our long-term target is $195.

Breakout trigger: A close over $165.50 (small positions)

BUY the 2013 Jan $190 call (GLD1319A190)

- or -

BUY the 2014 Jan $190 call (GLD1418A190)

Chart of GLD:

Originally listed on the Watch List: 04/14/12


Microsoft - MSFT - close: 30.81

Company Info

Shares of MSFT have helped lead big cap tech stocks higher in the first quarter with a very impressive rally. Now the stock has begun to correct. I suspect shares will actually over-correct to the downside and retest prior resistance near $28.00 as new support.

I am suggesting a trigger to launch bullish positions when MSFT dips to $28.50. We'll use a stop loss at $25.75 if triggered. Our long-term target is $36.00.

Note: MSFT is due to report earnings on April 19th.

Buy-the-Dip trigger: $28.50 (stop @ $25.75)

BUY the 2013 Jan $30 call (MSFT1319A30)

- or -

BUY the 2014 Jan $30 call (MSFT1418A30)

Chart of MSFT:

Originally listed on the Watch List: 04/14/12


Active Watch List Candidates:



American Intl. Group - AIG - close: 32.48

Comments:
04/14/12 update: AIG was showing some relative strength with only a minor loss for the week. The stock's trend is still higher but I am expecting a correction as the broader market pulls back.

I am suggesting we launch small bullish positions on a dip at $29.00 with a stop loss at $26.75. Our long-term target is $39.00.

Note: AIG is due to report earnings on May 3rd.

Buy-the-Dip trigger: $29.00, stop $26.75

(Small Positions)

BUY the 2013 Jan $35 call (AIG1319A35)

- or -

BUY the 2014 Jan $35 call (AIG1418A35)

Originally listed on the Watch List: 04/07/12


Activision Blizzard, Inc. - ATVI - close: 12.42

Comments:
04/14/12 update: ATVI has also held up reasonably well with only a minor decline for the week. Shares found support at their rising 50-dma. We are waiting for a breakout past overhead resistance.

I am suggesting we wait for ATVI to close over $13.25. We will buy calls the next day with a stop loss at $12.25. Our long-term target is the $16-18 range.

Breakout trigger: Wait for ATVI to close over $13.25, buy calls the next day with a stop at $12.25

BUY the 2013 Jan $15 call (ATVI1319A15)

- or -

BUY the 2014 Jan $15 call (ATVI1418A15)

Originally listed on the Watch List: 03/24/12


Ford Motor Co. - F - close: $11.92

Comments:
04/14/12 update: Trading in Ford has taken a turn for the worse. Shares appear to be in the process of breaking down from the $12.00-13.00 trading range. I am dropping Ford from the watch list. If the market corrects the stock could drop toward support near $10.00. I'll keep Ford on my radar screen for either a drop toward $10 or a breakout past $13.

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

Our Trade Never Opened.

04/14/12 removing Ford from the watch list.

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


Hasbro Inc. - HAS - close: 36.18

Comments:
04/14/12 update: Shares of HAS have retreated toward technical support near its 50 and 200-dma. The stock is in danger of breaking the intermediate trend of higher lows. Currently we are waiting for a breakout past resistance near $39.00.

I am suggesting we launch bullish positions when HAS closes above $39.25. More aggressive traders might want to jump in early when HAS closes over $38.00 instead. Our long-term target is $44.75.

HAS does not move very fast so we'll need to be patient.

Note: HAS reports earnings on April 23rd.

Breakout trigger: wait for a close over $39.25, stop 36.25

BUY the 2013 Jan $40 call (HAS1319A40)

- or -

buy the 2014 Jan $45 call (HAS1418A45)

Originally listed on the Watch List: 04/07/12


JDS Uniphase - JDSU - close: 13.00

Comments:
04/14/12 update: The trend in JDSU is in serious jeopardy. The stock appears to have formed a bearish double top with the peaks in February and March. If we see JDSU close under $12.00 we'll drop it as a candidate. Currently the plan is to wait for a breakout past resistance.

I am suggesting we launch small bullish positions if JDSU can close over $15.30. We'll start with a stop loss at $13.90. Our long-term target is $19.75. More aggressive traders could aim higher. FYI: The Point & Figure chart is bullish and is forecasting a long-term $26 target.

Breakout trigger: Wait for JDSU to close over $15.30 (stop 13.90)

BUY the 2013 Jan $17.50 call (JDSU1319A17.5)

- or -

BUY the 2014 Jan $20 call (JDSU1418A20)

Originally listed on the Watch List: 03/31/12


JPMorgan Chase & Co - JPM - close: 43.21

Comments:
04/14/12 update: JPM reported earnings on Friday. The company beat estimates by 16 cents and beat Wall Street's revenue estimate as well. Yet traders sold the news, which isn't a surprise. We've been expecting a pullback.

I am suggesting we buy calls on a dpi at $40.25 with a stop loss at $37.25. Our long-term target is $49.75.

Buy-the-Dip trigger: $40.25, stop loss 37.25

BUY the 2013 Jan $45 call (JPM1319A45)

- or -

BUY the 2014 Jan $45 call (JPM1418A45)

Originally listed on the Watch List: 04/07/12


Limited Brands, Inc. - LTD - close: 47.67

Comments:
04/14/12 update: The correction in LTD saw shares dip toward technical support at their 50-dma before bouncing. We are waiting for a deeper correction. The plan is to buy calls when shares hit $44.00 with a stop loss at $39.75. Our long-term target is $54.50.

Buy-the-Dip trigger: $44.00 (stop loss @ 39.75)

BUY the 2013 Jan $45 call (LTD1319A45)

03/24/12 adjusted buy-the-dip trigger to $44.00 with a stop at $39.75

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


McDonald's Corp. - MCD - close: 96.97

Comments:
04/14/12 update: MCD has created a new lower high with the failed rally near $99 this past week. Shares look headed for the $95-94 zone and I suspect we'll see MCD tag technical support at the simple 200-dma. Currently the 200-dma is at $93.37. I am raising our buy-the-dip trigger to $94.00. We will leave our stop at $88.50. If triggered our long-term target is $108.00.

Buy-the-Dip trigger: $94.00, stop 88.50

BUY the 2013 Jan $100 call (MCD1319A100)

04/14/12 adjust buy-the-dip trigger to $94.00.

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


Urban Outfitters Inc. - URBN - close: 28.67

Comments:
04/14/12 update: URBN spent the week hovering above technical support at its simple 50-dma. We are still waiting for a close over resistance. The stock has come close but it has not met our entry requirement yet.

Our plan is to wait for URBN to close above $30.50 and then buy call LEAPS the next day.

If the stock can breakout it could see a short squeeze with the most recent data listing short interest at more than 10% of the float. I am suggesting a trigger to launch small bullish positions when URBN closes over $30.50. We'll use a stop at $27.75. Our long-term target is $35.75.

Breakout trigger: Wait for URBN to close over $30.50 (stop 27.75)

BUY the 2013 Jan $35 call (URBN1319A35)

04/07/12 URBN broke out above resistance at $30.00 this past week but it has yet to close over our trigger at $30.50.

Originally listed on the Watch List: 03/31/12