Editor's Note:

CVX has graduated to our active play list. Our entry point will be Monday morning. I am promoting APKT to a new trade.



New Watch List Entries

CSCO - Cisco Systems

JBHT - JB Hunt Transport

SYK - Stryker Corp


Active Watch List Candidates

SOHU - Sohu.com

VMC - Vulcan Materials Co


Dropped Watch List Entries

APKT and CVX have moved to our new plays section tonight.



New Watch List Candidates:


Cisco Systems - CSCO - close: 20.48

Company Info

If investors are expecting the global economy to improve in 2013 then that should mean improvement for business spending for technology. CSCO will benefit from increased information technology spending. The stock has been on the rise and currently challenging resistance near the $20.50 level. This also happens to be where CSCO has a long-term trend line of lower highs dating back to the 2007 peak.

Aggressive traders might want to consider bullish positions if we see CSCO close above $20.75. I am suggesting we wait for CSCO to close above $21.25 and then buy calls the next day with a stop loss at $19.25. Our long-term target is $27.00.

FYI: CSCO is due to report earnings in earl to mid February.

Breakout trigger: Wait for a close above $21.25, buy calls the next day, stop loss at $19.25.

BUY the 2014 Jan $22 call (CSCO1418a22) current ask $1.32

- or -

BUY the 2015 Jan $25 call (CSCO1517a25) current ask $1.21

Chart of CSCO:

Originally listed on the Watch List: 01/12/13


JB Hunt Transport - JBHT - close: 60.88

Company Info

The Dow Jones transportation average is on the verge of breaking out to new all-time highs. Helping fuel those gains has been strength in shares of JBHT. This is a trucking company and the stock hit new record highs of its own in early January. Right now it's consolidating sideways in the $60-62 zone. JBHT is expected to report earnings in late January (maybe around Jan 24th). More conservative traders will want to consider waiting for JBHT to announce earnings and see how the market reacts before launching positions.

I am suggesting we wait for JBHT to close above $62.25 and then buy calls the next day with a stop loss at $57.75. Our long-term target is $69.75. However, we may have to adjust our exit target based on the options available. I don't see any 2014 Jan $65 or $70 strikes currently available. There are 2015 calls available but the spreads are pretty wide. Therefore tonight I am listing the 2013 August calls.

Breakout trigger: Wait for a close above $62.25, buy calls the next day, stop loss at $57.75.

BUY the 2013 Aug $65 call (JBHT1317H65) current ask $3.10

Chart of JBHT:

Originally listed on the Watch List: 01/12/13


Stryker - SYK - close: 58.85

Company Info

SYK is in the healthcare field. They manufacturer a number of reconstructive surgery products. With the aging baby boomer population they're probably going to do big business over the next several years.

The stock has spent months building a base under the $56-57 area. Shares managed a bullish breakout this past week. I don't want to chase it. Odds are good we'll see SYK pullback and retest broken resistance near $57.00 as new support. I am suggesting a trigger to buy calls on a dip at $57.25. We'll use a stop loss at $54.65. Our long-term target is $64.50 for now. We may adjust the exit target down the road.

Buy-the-Dip trigger: $57.25 (stop 54.65)

BUY the 2014 Jan $60 call (SYK1418a60) current ask $3.80

Chart of SYK:

Originally listed on the Watch List: 01/12/13


Active Watch List Candidates:



Sohu.com - SOHU - close: 48.22

Comments:
01/12/13: SOHU eked out a small gain for the week. That keeps the streak alive and the stock is now up five weeks in a row. I still see resistance at $50.00 so we're not willing to chase it. For the moment, we're waiting for 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: 54.58

Comments:
01/12/13: VMC displayed some relative strength this past week. Friday's gain left the stock at a new multi-year high. Readers might want to consider launching new bullish positions now. I am suggesting we stick to the plan I outlined last week.

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.

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