New Watch List Entries

CNX - CONSOL Energy

SWN - Southwestern Energy


Active Watch List Candidates

CCL - Carnival Corp.

COF - Capital One Financial

DE - Deere & Co.

FTR - Frontier Telecom

GE - General Electric

GLD - Gold ETF

JPM - JPMorgan Chase


Dropped Watch List Entries

FDO graduated to our active play list.



New Watch List Candidates:


CONSOL Energy Inc. - CNX - close: 35.14

Company Info

CNX is a coal and natural gas company. Several stocks in the coal industry appear to have built a significant bottom over the last few months. CNX is one of them. Shares were showing relative strength this past week in spite of new bearish comments from analysts.

I do want to warn you that CNX is scheduled to report earnings in late October. Right now the best date I can find is October 25th but that is not yet confirmed. More conservative investors will not want to open positions prior to the earnings announcement.

I am suggesting we open small bullish positions on a dip at $33.50 with a stop loss at $29.90. Our long-term target is $42.50. The Point & Figure chart for CNX is bullish with a long-term $47 target.

Buy-the-Dip trigger: $33.50 (Small Positions, stop 29.90)

BUY the 2014 Jan $40 call (CNX1418a40) current ask $4.45

Chart of CNX:

Originally listed on the Watch List: 10/13/12


Southwestern Energy - SWN - close: 36.11

Company Info

SWN is an oil and natural gas company that is slowly making its way higher. Shares ignored the market's recent weakness. Now SWN is on the verge of breaking out to new multi-month highs.

I am suggesting we wait for SWN to close over $37.00 and then buy calls the next day with a stop loss at $33.40. Our long-term target is $44.00. The Point & Figure chart for SWN is bullish with a long-term $51 target.

Breakout trigger: Wait for a close above $37.00 (stop 33.40)

BUY the 2014 Jan $40 call (SWN1418a40) current ask $4.45

Chart of SWN:

Originally listed on the Watch List: 10/13/12


Active Watch List Candidates:



Carnival Corp. - CCL - close: 36.76

Comments:
10/13/12: CCL spent this past churning sideways. It's trying to hold technical support at the 30-dma. I am still expecting a correction lower. Right now I am suggesting we open small bullish positions on a dip at $35.25 with a stop at $32.75.

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


Capital One Financial Corp. - COF - close: 58.21

Comments:
10/13/12: Financial stocks underperformed the market this past week but the pullback in COF wasn't that bad. Shares spent most of the week inside the $59-58 zone. The company is scheduled to report earnings soon on October 18th. More conservative traders will want to postpone launching any positions until after we see how the market reacts to earnings.

Earlier Comments:
COF can be somewhat volatile so we want to keep our position size small. I am suggesting we wait for COF to close above $60.50 and then buy calls the next day. We'll use a stop loss at $57.25. Our long-term target is $74.00 but we'll have to keep an eye on potential resistance at $70.00.

Breakout trigger: Wait for a close over $60.50 (stop 57.25)

BUY the 2014 Jan $65 call (COF1418a65)

Originally listed on the Watch List: 10/06/12


Deere & Co. - DE - close: 82.44

Comments:
10/13/12: DE displayed some weakness on Wednesday with a spike down toward support near $80 and its 200-dma. Shares quickly recovered. The stock remains under resistance near $84.00. Considering the broader market's recent weakness and new short-term trend lower I am not giving up on buying a dip in DE. Right now the plan is to buy calls on a dip at $79.00. More conservative traders could hold out for a dip near $78.00 instead. There is the possibility that DE turns higher and a close above $84.00 could be used as an alternative entry point.

We want to keep our position size small to limit our risk. Our long-term target is $94.00.

FYI: DE is not scheduled to report earnings until late November.

Buy-the-Dip trigger: $79.00 (stop loss 74.90) *Small Positions*

BUY the 2014 Jan $90 call (DE1418a90)

09/29/12 adjust our entry point to buy a dip at $79.00, adjust the stop loss to $74.90

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


Frontier Comm. - FTR - close: 4.81

Comments:
10/13/12: FTR managed a minor bounce for the week. Shares are still struggling with the simple 300-dma as overhead resistance. More aggressive traders could use a close over $5.00 as their entry point. I am suggesting we buy calls after FTR closes above $5.20. Wait for FTR to close above our trigger and buy calls the next day with a stop at $4.65. Our long-term target is $6.90. More aggressive traders could aim higher.

FYI: FTR is due to report earnings on Nov. 6th.

Breakout trigger: Wait for a close over $5.20 (stop 4.65)

BUY the 2014 Jan $5 call (FTR1418a5)

Originally listed on the Watch List: 09/29/12


General Electric - GE - close: 22.48

Comments:
10/13/12: After a five-week rally we have been expecting a correction in shares of GE. It looks like that correction finally started last week. Right now the plan is to buy a dip but more conservative traders may want to postpone any new positions until after we see how the market reacts to earnings. GE is scheduled to announce Q3 earnings on Oct. 19th, before the opening bell.

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)

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


SPDR Gold ETF - GLD - close: 170.06

Comments:
10/13/12: It looks like the rally in the GLD is finally starting to falter. The recent bounce attempt failed at short-term resistance near the 10-dma. I am expecting a correction lower soon.

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


JPMorgan Chase - JPM - close: 41.62

Comments:
10/13/12: JPM is only down nine cents for the week (-0.2%). That's not bad when most of the market is down -2.0% or more. The company reported earnings on Friday morning. Analysts were expecting $1.21 a share. JPM beat that by 19 cents. They also beat the revenue estimate with $25.15 billion in revenue for the quarter.

Even though the results were positive investors did not send the stock higher. I suspect JPM could see a deeper correction lower so I am not willing to chase it here. Readers could use a close over $42.50 as an alternative entry point to launch bullish positions. I am suggesting we stay patient and wait for a pullback.

We will keep our strategy to buy a dip at $38.50. Our long-term target is $45.00.

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

BUY the 2014 Jan $45 call (JPM1418a45)

10/12/12 JPM reported earnings

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