Editor's Note:

Our watch list continues to generate new trades. This past week saw MRK and ZNGA graduate to the active trade list.



New Watch List Entries

BBBY - Bed Bath & Beyond

CY - Cypress Semiconductor


Active Watch List Candidates

EL - The Estee Lauder Cos

M - Macy's Inc

TIF - Tiffany & Co


Dropped Watch List Entries

MRK & ZNGA graduated to our active play list. BAC met our entry point requirement on Friday so we're moving it to the new plays section.



New Watch List Candidates:


Bed Bath & Beyond - BBBY - close: 60.93

Company Info

Shares of BBBY have spent the last four and a half months building a bottom in the $55-60 zone. Shares have actually created an inverse (bullish) head-and-shoulders pattern. BBBY is currently in the process of breaking out through resistance in the $60 area along with some significant moving averages. I am suggesting we wait for BBBY to close above $62.50 and then buy calls the next morning. We'll start with a stop loss at $58.25. Our long-term target is $74.50.

NOTE: BBBY's next earnings report is expected in early April. More conservative investors will want to wait until after we see how the market reacts to the earnings results before initiating new positions, regardless if BBBY meets our entry requirement.

Breakout trigger: Wait for BBBY to close above $62.50,
then buy calls the next day, stop loss @ 58.25

BUY the 2014 Jan $65 call (BBBY1418a65) current ask $3.95

Chart of BBBY:

Originally listed on the Watch List: 03/16/13


Cypress Semiconductor - CY - close: 11.30

Company Info

CY is in the semiconductor industry. The stock underperformed its peers for the first couple of months of 2013 but shares have started to rally. CY is up three weeks in a row and pushing past technical resistance at its simple 200-dma. After months and months of lower highs CY is on the verge of a new higher high. More aggressive traders might want to consider bullish positions on a breakout past the $11.50 mark. I am suggesting we wait for CY to close above $12.00 and then buy calls the next day. If triggered our target is $16.00.

Breakout trigger: Wait for CY to close above $12.00,
then buy calls the next day, stop loss @ 10.45

BUY the 2014 Jan $13 call (CY1418a13) current ask $0.75

BUY the 2015 Jan $15 call (CY1517a15) current ask $0.95

Chart of CY:

Originally listed on the Watch List: 03/16/13


Active Watch List Candidates:



The Estee Lauder Companies - EL - close: 63.34

Comments:
03/16/13: Estee Lauder retreated lower this past week. Shares are now back below their 50-dma. If the sell-off continues EL could be testing technical support near its 100-dma soon. Right now we are waiting for a breakout to new highs.

I am suggesting we wait for EL to close above $66.55 and then buy calls the next day. I am suggesting that we start with small positions (half your normal trade size) to limit our risk. Our long-term target is $74.50.

Breakout trigger: Wait for EL to close above $66.55,
then buy calls the next day, stop loss @ 61.90

BUY the 2014 Jan $70 call (EL1418a70)

03/09/13 keep positions small to start!

Originally listed on the Watch List: 03/09/13


Macy's Inc. - M - close: 41.78

Comments:
03/16/13: Macy's came very close to meeting our entry point requirements. The stock flirted with a bullish breakout past resistance near $42.00 most of the week. Then Friday saw some profit taking with a dip toward its 10-dma. Macy's still looks poised to rally. Overall our strategy is unchanged.

I am suggesting we wait for Macy's to close above $42.50 and then buy calls the next morning with a stop loss at $39.25. If triggered our long-term target is $48.50. FYI: The Point & Figure chart is bullish with a $53 target.

Breakout trigger: Wait for M to close above $42.50,
then buy calls the next day, stop loss @ 39.25

BUY the 2014 Jan $45 call (M1418a45)

Originally listed on the Watch List: 03/09/13


Tiffany & Co. - TIF - close: 69.42

Comments:
03/16/13: The correction in shares of TIF has stalled with a three-day bounce. The stock will begin trading ex-dividend on Monday. The quarterly cash dividend is 32 cents. We're still waiting for a correction toward $66.00. Actually our suggested entry point is $66.50.

If triggered we'll start with a stop loss at $63.40. Our long-term target is $74.00 but readers could definitely aim higher.

NOTE: TIF is scheduled to report earnings on March 22nd.

Buy-the-Dip trigger: $66.50, stop loss 63.40

BUY the 2014 Jan $75 call (TIF1418a75)

03/09/13 adjust buy-the-dip trigger to $66.50

Originally listed on the Watch List: 03/02/13