New Watch List Entries

CI - Cigna Corp.

PFE - Pfizer Inc.

WMT - Wal-Mart Stores


Active Watch List Candidates

ATVI - Activision Blizzard

AIG - American Intl. Group

AXP - American Express

CREE - Cree, Inc.

GLD - Gold ETF

HAS - Hasbro

JDSU - JDS Uniphase

LTD - Limited Brands

MCD - McDonald's Corp

MSFT - Microsoft Corp.

URBN - Urban Outfitters


Dropped Watch List Entries

JDSU has been removed from the watch list.



New Watch List Candidates:


Cigna Corp. - CI - close: 48.02

Company Info

CI is a healthcare company. In late March the stock broke out from a major trading range. Since then shares have consolidated sideways between prior resistance near $47 and new resistance near $50.

Big picture this breakout from the trading range is significant and the follow through has probably been muted due to the broader market weakness. I am suggesting we open bullish positions when CI closes above $50.25. We'll buy calls the next day with a stop loss at $46.40.

There is some long-term resistance near $57.00 but we'll set our target at $64.00. Currently the P&F chart is forecasting at $60 target.

FYI: CI is due to report earnings on May 3rd.

Breakout trigger: Close over $50.25, stop loss 46.40

BUY the 2013 $55 call (CI1319A55)

- or -

BUY the 2014 $55 call (CI1418A55)

Chart of CI:

Originally listed on the Watch List: 04/21/12


Pfizer Inc. - PFE - close: 22.56

Company Info

There has been a long-term worry that the large pharmaceutical companies like PFE would continue to lose market share to generic drug makers as more and more of their core products lose patent protection. This does remain a risk but shares of PFE, and MRK, and GSK have all reversed their long-term declines. PFE has a new bullish trend of higher lows and higher highs.

Currently the stock is hovering under resistance near $22.80. I am suggesting we wait for PFE to close over $23.20 and then launch positions the next morning with a stop loss at $20.65. Our long-term target is $28.00. I will list the 2013 calls but I prefer the 2014 because PFE does not move very fast.

FYI: PFE is due to report earnings on May 1st. More conservative traders may want to wait on launching positions until after we see the market's reaction to the earnings news.

Breakout trigger: Wait for a close over $23.20, use a stop at $20.65

BUY the 2013 Jan $22.50 call (PFE1319A22.5) current ask $1.31

- or -

BUY the 2014 Jan $25 call (PFE1418A25) current ask $1.09

Chart of PFE:

Originally listed on the Watch List: 04/21/12


Wal-Mart Stores - WMT - close: 62.45

Company Info

WMT is the largest retailer in the world. After years of churning sideways it seems the stock may have found it's mojo again. The stock seems to be unaffected by recent stories that the company used a massive bribery scheme to help its expansion across Mexico. Big picture shares have broken out into a new bullish trend but it's quickly approaching major resistance in the $63-64 area.

Aggressive traders may want to buy calls on a close over $62.75. I am suggesting we wait and buy calls when WMT closes over $64.00. We'll use a stop loss at $57.75 to start. Our long-term target is the $74.75 mark although we may adjust it higher. Currently the Point & Figure chart is forecasting a $91 target.

WMT does not move very fast so we'll need patience. I am listing the 2013 calls but I prefer the 2014 calls instead.

Breakout trigger: Wait for a close over $64.00, stop @ 57.75

BUY the 2013 Jan $65 call (WMT1319A65) current ask $1.86

- or -

BUY the 2014 Jan $65 call (PFE1418A65) current ask $3.55

Chart of WMT:

Originally listed on the Watch List: 04/21/12


Active Watch List Candidates:



American Intl. Group - AIG - close: 32.06

Comments:
04/21/12 update: The financial sector looks poised to correct lower and AIG will likely follow. The $30.00 level should be support but I am expecting AIG will actually overcorrect.

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: 12.20

Comments:
04/21/12 update: ATVI has dipped to technical support at its 200-dma. If the market does break down again we might see shares fall toward the $11.75-11.50 zone. If that happens then we'll consider buying a bounce near $11.50. However, currently we are waiting for a breakout higher.

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.

FYI: ATVI is due to report earnings on May 9th.

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


American Express - AXP - close: 57.45

Comments:
04/21/12 update: AXP didn't see a lot of movement last week. While the trend is still higher I am expecting AXP will correct lower with the financials. Aggressive traders may want to buy calls on a dip near $54.00.

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)

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


Cree, Inc. - CREE - close: 30.49

Comments:
04/21/12 update: It was another choppy week for CREE. The stock remains inside its $28-33 trading range. Nimble traders might want to consider buying a bounce near $28.50with a tight stop loss. 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)

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


Gold ETF - GLD - close: 159.54

Comments:
04/21/12 update: The U.S. dollar has been drifting lower the last couple of weeks. Normally a weaker dollar would be bullish for gold but it's not helping the GLD. Instead the GLD is drifting lower and looks like it will test technical support at its simple 300-dma soon. If we see the GLD close under $156.50 we will drop it as a bullish candidate and aggressive traders might want to consider new bearish positions instead.

Currently 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 inverse 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)

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


Hasbro Inc. - HAS - close: 35.92

Comments:
04/21/12 update: HAS' rival Mattel (MAT) reported earnings last Monday and missed both the top and bottom line estimates. Shares of MAT gapped down with a big loss on this news. HAS dipped to its 100-dma in reaction to MAT's announcement. This week HAS reports earnings on April 23rd.

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.

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: 12.95

Comments:
04/21/12 update: I am giving up on JDSU. The recent consolidation sideways is starting to look like a bear-flag pattern. Nimble traders may want to consider bearish positions on a drop below $12.00 and target $10.00. I am removing JDSU as a bullish candidate. It's unlikely shares will hit our entry point (close over $15.30) any time soon.

Breakout trigger: Wait for JDSU to close over $15.30

Our Trade Did Not Open

04/21/12 remove JDSU from the watch list.

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


JPMorgan Chase & Co - JPM - close: 42.72

Comments:
04/21/12 update: So far so good. We have been expecting JPM to correct lower. The stock closed on its low for the week.

I am suggesting we buy calls on a dip 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: 49.26

Comments:
04/21/12 update: LTD continues to show relative strength. While the strength is encouraging it's not helping our efforts to buy a significant dip in this stock. LTD should report earnings in about two or three weeks. We'll reconsider our entry point following the earnings announcement. Currently 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: 95.94

Comments:
04/21/12 update: MCD came oh so close to hitting our buy-the-dip trigger on Thursday. Shares spiked lower and hit $94.13 at its low just one day ahead of its earnings report. MCD reported on Friday morning and delivered results that were in-line with Wall Street's estimates. The company continues to see healthy same-store sales growth.

The trend is still lower so MCD should hit our buy-the-dip trigger at $94.00 soon. We have a stop loss at $88.50. More conservative traders may want to wait for a dip or a bounce in the $91-92 area instead. 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


Microsoft - MSFT - close: 32.42

Comments:
04/21/12 update: Hmm... after the super strong Q1 rally we were not expecting MSFT to rally on its earnings news. The company reported earnings on Thursday night and investors bought the news with a +4.5% rally on Friday. Shares still have resistance near $33.00.

At the moment I am unwilling to chase it. I suggest we give MSFT a couple of weeks and then we'll re-evaluate. Currently 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.

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

BUY the 2013 Jan $30 call (MSFT1319A30)

- or -

BUY the 2014 Jan $30 call (MSFT1418A30)

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


Urban Outfitters Inc. - URBN - close: 28.94

Comments:
04/21/12 update: It was another quiet week for shares of URBN with the stock consolidating sideways. We are still waiting for URBN to meet our entry point requirements. 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