Editor's Note:

We are hitting the refresh button on our watch list. CVX and WFC have jumped to the active trade list. I have removed OMX, ROST, UIS, and WMT as candidates. We're adding new three candidates.



New Watch List Entries

DE - Deere & Co.

JOY - Joy Global, Inc.

MDR - McDermott Intl.


Active Watch List Candidates

AMED - Amedisys Inc.

CCL - Carnival Corp.

GLD - Gold ETF


Dropped Watch List Entries

CVX and WFC graduated to the play list.

I have removed OMX, ROST, UIS, and WMT as candidates.



New Watch List Candidates:


Deere & Co. - DE - close: 82.00

Company Info

Investors have been pouring money into the industrial goods sector following the Federal Reserve's news QE announcement. Shares of DE have rallied past resistance near $80 and its 200-dma. I am suggesting we buy calls on a dip at $80.00 with a stop loss at $76.45. Our long-term target is $94.00.

Buy-the-Dip trigger: $80.00 (stop loss 76.45)

BUY the 2014 Jan $90 call (DE1418a90) current ask $6.10

Chart of DE:

Originally listed on the Watch List: 09/15/12


Joy Global, Inc - JOY - close: 61.60

Company Info

Commodity-related names have also been soaring following the Fed's new QE announcement. JOY has broken out from its $48-58 trading range. The stock appears to have built a new bottom over the last three months.

I am suggesting we buy calls on a dip at $58.50. We'll use a stop loss at $54.50. More aggressive traders could buy the 2013 calls. I am listing the January 2014 calls. Our long-term target is $78.50.

Buy-the-Dip trigger: $58.50 (stop loss: 54.50)

BUY the 2014 Jan $70 call (JOY1418a70) current ask $9.35

Chart of JOY:

Originally listed on the Watch List: 09/15/12


McDermott Intl. - MDR - close: 13.32

Company Info

MDR is another stock in the industrial goods sector. Shares have recently broken through several layers of resistance in the $12.00-12.50 area. I am suggesting a buy-the-dip trigger at $12.55 with a stop loss at $11.45. Our long-term target is $14.90. More aggressive traders could aim higher.

Buy-the-Dip trigger: $12.55 (stop 11.45)

BUY the 2014 Jan $15 call (MDR1418a15) current ask $2.40

Chart of MDR:

Originally listed on the Watch List: 09/15/12


Active Watch List Candidates:



Amedisys Inc. - AMED - close: 15.40

Comments:
09/15/12 update: AMED came close but has not hit our buy-the-dip trigger yet at $15.05. I am adjusting our entry point strategy. We will wait for AMED to close over $16.10 and then launch positions the next day. If triggered we'll use a stop loss at $13.90 and our target is $19.90. I am also changing the strike to the March 16 call.

Please note that AMED does have the January 2013 calls but I am suggesting the March 2013 calls instead.

Trigger: Wait for a close over $16.10 (stop 13.90)

BUY the 2013 Mar $16 call (AMED1316c16)

09/15/12 strategy change: wait for AMED to close over $16.10, then buy calls the next day. Use the March 2013 $16 call. Raise the stop to $13.90. Move the exit target to $19.90.

Originally listed on the Watch List: 09/08/12


Carnival Corp. - CCL - close: 37.96

Comments:
09/15/12 update: CCL rallied 90 cents for the week and closed at a new 52-week high. I still don't want to chase it. We will adjust our buy-the-dip trigger to $36.00 and move our stop loss to $33.75.

Our long-term target is $42.00. FYI: The point and figure chart is bullish with a $48 target.

NOTE: Readers may also want to check out shares of RCL, which have a similar pattern.

Buy-the-Dip trigger: $36.00 (stop loss @ 33.75) *Small Positions*

BUY the 2014 Jan $40 call (CCL1418a40)

09/15/12 move the trigger to $36.00 and the stop to $33.75

Originally listed on the Watch List: 09/08/12


SPDR Gold ETF - GLD - close: 171.80

Comments:
09/15/12 update: The combination of the ECB's new bond buying program and the Fed's new QE program is driving commodity prices higher, especially gold. The GLD has soared over the last four weeks. I don't want to chase it here. Nothing moves in a straight line for very long so gold will see some profit taking eventually.

We will move our buy-the-dip trigger to $165.50 and move our stop loss to $159.00. I am adjusting our exit targets. Plan to exit the 2013 calls at $174.50. Exit the 2014 calls in the $185-200 range.

Buy-the-Dip trigger: $165.50 (stop loss @ 159.00)

BUY the 2013 Jan $175 call (GLD1319a175)

- or -

BUY the 2014 Jan $200 call (GLD1418a200)

09/15/12 adjust the trigger to $165.50, stop to $159.00.
09/08/12 adjust the buy-the-dip trigger to $164.00 (up from $162)

Originally listed on the Watch List: 09/01/12


OfficeMax Inc. - OMX - close: 8.15

Comments:
09/15/12 update: Wow! I thought OMX looked ready to move but I was not expecting a +24% rally in a week. Unfortunately our trade was not open. It definitely looks like we missed the move. I am removing OMX as a watch list candidate. Readers may want to keep it on their radar screen for a pullback. Right now OMX is very short-term overbought and due for some profit taking.

Trade did not open.

09/15/12 removed from the watch list.

Originally listed on the Watch List: 09/08/12


Ross Stores, Inc. - ROST - close: 68.04

Comments:
09/15/12 update: ROST has been underperforming the market the last couple of weeks. The long-term trend is still up but the stock's recent performance is worrisome. I am removing ROST as a watch list candidate. Our trade never opened.

Our trade did not open.

09/15/12 removed from the watch list.

Originally listed on the Watch List: 08/18/12


Unisys Corp. - UIS - close: 22.64

Comments:
09/15/12 update: UIS continues to drift higher but we don't want to chase it. I am removing UIS as a candidate. More nimble traders may want to consider buying calls on a dip near the 20-dma instead.

Trade did not open.

09/15/12 removed from the watch list.

Originally listed on the Watch List: 08/18/12


Wal-Mart Stores - WMT - close: 74.50

Comments:
09/15/12 update: WMT has rebounded off its 50-dma. The stock is now testing resistance near $75 and its all-time highs set back in July this year. Short-term traders may want to buy calls if WMT can close over $75.50 and then aim for the $80 area. Yet for a long-term trade, I would not buy calls at current levels. I am removing WMT as a candidate for now.

Trade did not open.

09/15/12 removed WMT from the watch list.

Originally listed on the Watch List: 09/01/12