New Watch List Entries

HFC - HollyFrontier

QCOM - QUALCOMM Inc.

WFC - Wells Fargo


Active Watch List Candidates

CAT - Caterpillar Inc.

CLX - The Clorox Co.

DIS - Walt Disney Co.

HCP - HCP, Inc.


Dropped Watch List Entries

TWX graduated to the play list.

I have removed JPM and SBUX.



New Watch List Candidates:


HollyFrontier Corp. - HFC - close: 39.40

Company Info

HFC is a major U.S. oil and gas refiner. The stock has been showing strength and just closed at new multi-year highs. The all-time high is $40.28 from 2007. HFC is likely to hover here, just under resistance near $40, until it reports earnings on August 8th (before the opening bell).

I am suggesting an entry if HFC can close over $40.50. We'll buy calls the next day with a stop loss at $36.90. Our long-term target is $44.50 for the 2013 calls and $48.50 for the 2014 calls.

Breakout trigger: close over $40.50 (stop 36.90)

BUY the 2013 Jan $42 call (HFC1319A42) current ask $2.95

- or -

BUY the 2014 Jan $45 call (HFC1418A45) current ask $5.50

Chart of HFC:

Originally listed on the Watch List: 08/06/12


QUALCOMM Inc. - QCOM - close: 60.13

Company Info

QCOM makes some of the crucial chip sets inside your smart phone. The stock has produced a double bottom with the lows in June and July. Now the stock is testing resistance near $60 and its 100-dma and its 150-dma.

I am suggesting we wait for QCOM to close over $61.50 and then buy calls the next day. Our long-term target is $68.50 (for now).

Breakout trigger: wait for close over $61.50 (stop 57.40)

BUY the 2013 Jan $65 call (QCOM1319A65) current ask $2.09

- or -

BUY the 2014 Jan $70 call (QCOM1418A70) current ask $4.20

Chart of QCOM:

Originally listed on the Watch List: 08/06/12


Wells Fargo & Co - WFC - close: 34.00

Company Info

WFC is a large American bank that has rallied to resistance near its multi-year highs in the $34-35 area. A breakthrough resistance here could signal a new run towards the $40-45 area.

I am suggesting we buy calls if WFC Can close over $35.00. We'll buy calls the next day. Our starting target is $39.85. We'll use a stop loss at $32.75. FYI: The point & figure chart is bullish with a $57 target.

Breakout trigger: wait for close over $35.00 (stop 32.75)

BUY the 2014 $40 call (WFC1418A40) current ask $1.85

Chart of WFC:

Originally listed on the Watch List: 08/06/12


Active Watch List Candidates:



Caterpillar Inc. - CAT - close: 86.35

Comments:
08/06/12 update: CAT has continued to work its way higher. Now shares are testing short-term resistance near $87.00. I am adjusting our plan to buy calls if CAT can close over $87.50.

Our long-term target is the $110-115 zone (although we'll exit the 2013 calls before CAT hits our final target).

Breakout trigger: Close over $87.50, stop loss @ 79.90

BUY the 2013 Jan $95 call (CAT1319A95)

- or -

BUY the 2014 Jan $100 call (CAT1418A100)

08/06/12 adjust entry trigger to a close over $87.50
07/21/12 adjusted entry point to wait for a close over $88.00, stop loss 79.90

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


The Clorox Co. - CLX - close: 71.48

Comments:
08/06/12 update: Shares of CLX have taken a turn for the worse in the last couple of weeks. If the stock doesn't improve soon it may not survive on our watch list. CLX is trading near the bottom of its $71-74 trading range.

I am suggesting we wait for CLX to close over $75.50 and then buy calls the next day.

Breakout trigger: Wait for a close over $75.50 (stop 71.75)

BUY the 2013 Jan $75 call (CLX1319A75)

- or -

BUY the 2014 Jan $80 call (CLX1418A80)

Originally listed on the Watch List: 07/14/12


Walt Disney Co. - DIS - close: $49.65

Comments:
08/06/12 update: DIS continues to grind its way higher. While the trend is up we don't want to open positions yet. The company is due to report earnings tomorrow on August 7th. I suspect DIS could see some profit taking on the report. That's why we're waiting to buy a dip at $45.00. If we don't get triggered this week then we'll re-evaluate this weekend.

I am suggesting we buy call LEAPS on a dip at $45.00 with a stop loss at $41.75. Our long-term target is $54.50.

Buy-the-Dip trigger: $45.00 (stop 41.75)

BUY the 2014 Jan $50 call (DIS1418A50)

Originally listed on the Watch List: 06/16/12


HCP, Inc. - HCP - close: 46.28

Comments:
08/06/12 update: After trading at all-time highs near $47.50 for a few days it looks like HCP is starting to correct. I will adjust our buy the dip entry trigger to $43.00. We'll give HCP another couple of weeks before we consider dropping it.

Buy-the-Dip trigger: $43.00 (stop loss 39.45)

BUY the 2013 Jan $45 call (HCP1319a45)

08/06/12 adjust trigger dip to $43.00

Originally listed on the Watch List: 07/21/12


JPMorgan Chase - JPM - close: 36.30

Comments:
08/06/12 update: JPM continues to chop sideways. However, it is worth noting that the stock seems to be building a bullish trend of higher lows. A breakout past resistance in the $37-38 area would definitely look bullish. Yet there is additional resistance at $40.00.

I am removing JPM from the watch list. We've been waiting a long time for shares to move and it's not happening. I'm removing it from the watch list and putting it on my radar screen for a close over $38.50 or a drop toward $31.

Trade did not open

08/06/12 we're giving up on JPM producing an entry point soon.

Originally listed on the Watch List: 05/19/12


Starbucks Corp. - SBUX - close: 43.48

Comments:
08/06/12 update: Ouch! It's been an ugly two weeks for SBUX. The stock has broken down from its multi-week trading range. I suspect the sell-off is not over yet. Aggressive traders could look for a bounce near $40 as a potential entry point but we are removing SBUX from the watch list for now.

Trade did not open.

08/06/12 removed from the watch list.
06/30/12 adjust strategy to wait for a close over $56.25, new stop @ 50.75, adjust option strikes.
05/19/12 adjust stop loss to $45.75

Originally listed on the Watch List: 05/05/12