Our watch list was very successful last week with four candidates graduating to the play list.
Tonight I'm only adding one new watch list candidate. Look for more trading ideas on the radar screen in our new play section tonight.
New Watch List Entries
APKT - Acme Packet
Active Watch List Candidates
CVX - Chevron Corp.
SOHU - Sohu.com
VMC - Vulcan Materials Co
Dropped Watch List Entries
ADI, AKAM, ANR, and URBN all graduated to the active play list.
New Watch List Candidates:
Acme Packet - APKT - close: 23.94
APKT is in the networking business that enable voice, video, data and more across the Internet.
The stock has been crushed from its 2011 highs above $80 a share. The last couple of quarters have seen APKT building a bottom beneath the $20 level. Now shares are breaking out past major resistance. APKT was outperforming the market on Friday with a +11% gain on an analyst upgrade.
We don't want to chase it here. I am suggesting we wait and buy calls on a dip at $22.50. If triggered we'll use a stop loss at $19.75. Our long-term target is $34.00. I do expect the $30.00 level to offer significant resistance. FYI: The Point & Figure chart is bullish and forecasting a long-term target of $41.
Buy-the-Dip trigger: $22.50
BUY the 2014 Jan $30 call (APKT1418a30) current ask $3.20
Chart of APKT:
Originally listed on the Watch List: 01/05/13
Active Watch List Candidates:
Chevron Corp. - CVX - close: 110.50
A big bounce in the energy sector and strength in oil prices helped fuel the gain for CVX. This stock has bounced back toward technical resistance at its simple 100-dma.
I am suggesting we wait for CVX to close above $111.50 and then buy calls the next day with a stop loss at $104.75. Our long-term target is $124.50.
FYI: Earnings are expected in the last week of January.
Breakout trigger: Wait for a close above $111.50 (stop: 104.75)
BUY the 2014 Jan $120 call (CVX1418a120)
Originally listed on the Watch List: 12/22/12
Sohu.com - SOHU - close: 47.90
SOHU posted a gain for the week but the action actually looks bearish. SOHU is up four weeks in a row and up six out of the last seven weeks. Shares are overbought at the moment and the action on Wednesday looks like a failed rally at resistance near $50.00. I am still expecting a correction lower.
Broken resistance at $45.00 should be new support. I am suggesting we buy calls on a dip a t $45.50. Our long-term target is $58.50.
Buy-the-Dip trigger: $45.50 (stop loss: 42.40)
BUY the 2014 Jan $50 call (SOHU1418a50)
Originally listed on the Watch List: 12/31/12
Vulcan Materials Co. - VMC - close: 53.85
We have been patiently waiting for VMC to dip towards support near $50.00. The stock is not cooperating. I am suggesting we adjust our strategy and look for more of a momentum trade. VMC has rallied to new multi-year highs.
The $55.00 level looks like resistance.
Our new plan will be to wait for VMC to close above $55.25 and then buy calls the next day with a stop loss at $49.75. Our long-term target is $68.50 but I do expect the $60.00 level to be resistance for a while.
I am adjusting our strike price to the 2014 Jan $60 call.
We want to keep our position size small!
Buy-a-Breakout trigger: Wait for a close above $55.25, then buy calls the next day (stop loss 49.75)
BUY the 2014 Jan $60 call (VMC1418a60)
01/05/12 new strategy. Wait for a close above $55.25 with a stop at $49.75. Our long-term target is $68.50. Small positions.
Originally listed on the Watch List: 12/02/12