New Watch List Entries

GE - General Electric

JPM - JPMorgan Chase


Active Watch List Candidates

AMED - Amedisys Inc.

CCL - Carnival Corp.

DE - Deere & Co.

GLD - Gold ETF

JOY - Joy Global, Inc.


Dropped Watch List Entries

MDR graduated to the play list.



New Watch List Candidates:


General Electric - GE - close: 22.53

Company Info

I was very surprised to see the relative strength in GE considering all of the uncertainty around the health of the global economy. Europe is slowing down. China is slowing down. India is slowing down. The U.S. is improving at a glacial pace. Yet shares of GE, a huge multi-national conglomerate, is climbing to new multi-year highs. Granted most of these nations are all trying to stimulate their economy to improve things.

After a three-week rally we don't want to buy GE now. I am suggesting we wait for a pullback. I am listing a buy-the-dip entry point at $21.50 with a stop loss at $19.75. Our long-term target is $27.50.

Buy-the-Dip trigger: $21.50 (stop 19.75)

BUY the 2014 Jan $25 call (GE1418a25) current ask $1.02

Chart of GE:

Originally listed on the Watch List: 09/22/12


JPMorgan Chase - JPM - close: 40.88

Company Info

JPM is a banking titan. The market's recent rally has pushed shares through significant resistance in the $38 area. We don't want to chase it here. I am suggesting we buy calls on a dip at $38.50 with a stop loss at $35.75. Our long-term target is $45.00.

Buy-the-Dip trigger: $38.50 (stop 35.75)

BUY the 2014 Jan $45 call (JPM1418a45) current ask $2.91

Chart of JPM:

Originally listed on the Watch List: 09/22/12


Active Watch List Candidates:



Amedisys Inc. - AMED - close: 15.11

Comments:
09/22/12: Aside from a very brief spike down on Thursday morning it was a very quiet week for shares of AMED. I am still suggesting we wait for the stock to close over $16.10 before launching positions the following 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: 37.39

Comments:
09/22/12: Shares of CCL are holding up pretty well. There hasn't been much profit taking. The stock is consolidating sideways in the $37-38 zone. This week I expect CCL to see a lot more volatility. The company is due to report earnings on September 25th, before the opening bell. Analysts are expecting a profit of $1.46 a share. CCL's results and management's guidance could produce big moves on Tuesday.

Due to this potential for volatility following the earnings report I am tweaking our buy-the-dip trigger to $35.25 and adjusting our stop loss to $32.75. Short-term traders might want to consider buying a breakout past $38.00 instead.

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

Buy-the-Dip trigger: $35.25 (stop loss @ 32.75) *Small Positions*

BUY the 2014 Jan $40 call (CCL1418a40)

09/22/12 earnings are due on Sep. 25th. We are adjusting our entry trigger to $35.25 and our stop loss to $32.75
09/15/12 move the trigger to $36.00 and the stop to $33.75

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


Deere & Co. - DE - close: 82.70

Comments:
09/22/12: Deere is still slowing drifting higher. The relative strength is encouraging but we don't want to chase it. 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)

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


SPDR Gold ETF - GLD - close: 171.96

Comments:
09/22/12: Gold as an investment garnered a lot of bullish analysts comments this past week. Multiple analysts are forecasting gold prices to rally $2,000 an ounce and beyond. One analysts suggested gold could rise into the $3,000 to $5,000 range. The main culprit was our global QE environment with multiple nations printing money, which makes commodities more expensive. Considering all the bullish comments I am surprised that the GLD didn't move very much. After a four-week rally higher a one-week pause isn't a surprise.

I still don't want to chase it. Gold will see a correction eventually and I'd rather buy a pullback. Currently I am suggesting we buy calls on a dip at $165.50. 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


Joy Global, Inc - JOY - close: 59.41

Comments:
09/22/12: I want to remind readers that JOY can be a volatile stock. Shares have been consolidating sideways near $60.00. I am adjusting our buy-the-dip entry point from $58.50 down to $57.50. We will move the stop loss to $53.90.

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: $57.50 (stop loss: 53.90)

BUY the 2014 Jan $70 call (JOY1418a70)

09/22/12 adjust entry to buy a dip at $57.50, stop to $53.90

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