Editor's Note:

We have moved VMC to our new play list tonight.



New Watch List Entries

MTW - Manitowoc Inc.

SCHW - Charles Schwab


Active Watch List Candidates

CSCO - Cisco Systems

SOHU - Sohu.com

SYK - Stryker Corp


Dropped Watch List Entries

JBHT graduated to our play list.
VMC has been moved to our new play section



New Watch List Candidates:


The Manitowoc Co - MTW - close: 16.66

Company Info

MTW has two main business divisions. One makes cranes and the other is in the food service equipment business. The stock has been on the upswing but the rally stalled at its 2012 highs near $17.00. Since then MTW has been consolidating sideways. I suspect we will see MTW breakout and make a run towards the 2011 highs above $22.

I am suggesting we wait for MTW to close above $17.10 and then buy calls the next day. We'll start with a stop loss at $15.75. Our long-term target is $21.50. Coincidentally the Point & Figure chart is bullish with a $21 target.

NOTE: MTW is due to report earnings on January 31st. More conservative traders may want to wait until after we see how the market reacts to MTW's earnings before initiating new positions.

Breakout trigger: Wait for a close above $17.10, buy calls the next day, stop loss at $15.75.

BUY the 2014 Jan $20 call (MTW1418a20) current ask $1.70

Chart of MTW:

Originally listed on the Watch List: 01/19/13


The Charles Schwab Corp. - SCHW - close: 15.45

Company Info

SCHW, a large, nationwide investment brokerage, has been following the financial sector higher. Now shares have stalled below their 2012 highs near $15.50. The stock has been consolidating sideways in the $15.00-15.50 zone for the last two weeks. I suspect we'll see it breakout higher soon.

I am suggesting we wait for shares to close above $15.65 and then buy calls the next day. We'll start with a stop loss at $14.70. Our long-term target is $18.75. More aggressive traders can aim higher. The Point & Figure chart is bullish with a $24 target.

Breakout trigger: Wait for a close above $15.65, buy calls the next day, stop loss at $14.70.

BUY the 2014 Jan $17 call (SCHW1418a17) current ask $0.85

Chart of SCHW:

Originally listed on the Watch List: 01/19/13


Active Watch List Candidates:



Cisco Systems - CSCO - close: 21.02

Comments:
01/19/13: CSCO has spent the last few days consolidating sideways near the $21.00 level. These are new multi-month highs for the stock but we want to see a breakout past resistance.

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 early 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 $1.47

- or -

BUY the 2015 Jan $25 call (CSCO1517a25) current ask $1.30

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


Sohu.com - SOHU - close: 48.28

Comments:
01/19/13: We have been waiting for a correction in SOHU but so far it hasn't happened yet. Thursday's pullback looks like a potential bearish reversal but there hasn't been any follow through yet. I still don't want to chase it with SOHU hovering under resistance near the $50.00 level.

Earlier Comments:
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.

NOTE: SOHU's earnings are expected in early February.

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


Stryker - SYK - close: 61.55

Comments:
01/19/13: Wow! Now I wish we had used a bullish breakout trigger to buy calls on SYK instead of waiting for a dip. The stock has exploded higher. SYK is now up about +14% from its late December low near $54.00. I still don't want to chase it.

We will raise our buy-the-dip trigger from $57.25 to $58.25. Our long-term target is $64.50 for now. We may adjust the exit target down the road.

Buy-the-Dip trigger: $58.25 (stop 54.65)

BUY the 2014 Jan $60 call (SYK1418a60)

01/19/13 adjust the buy-the-dip trigger up to $58.25

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