New Watch List Entries

GG - Goldcorp Inc.

UA - Under Armour


Active Watch List Candidates

CY - Cypress Semiconductor


Dropped Watch List Entries

I am removing EL tonight.



New Watch List Candidates:


Editor's Note:

I remain very cautious on the market. Yes, the trend is up but stocks are overbought and way overdue for a correction. My bias is for a market pullback in the next two to four weeks but the market hasn't called me yet to ask for my opinion.

We have to trade the opportunities we see. I am urging caution. If you choose to trade right now I am suggesting small positions and tighter stops.


Goldcorp. Inc. - GG - close: 33.63

Company Info

Gold mining stocks have been significant underperformers over the last six months. Yet it appear the industry and shares of GG have found major support. I suspect that if the broader market does see a pullback then gold and gold miners might outperform as more defensive trades.

Right now GG is trying to form a bottom along support near the $32.00 level. Shares are consolidating sideways in the $32-34 zone and there is additional overhead resistance near its 50-dma. Before we continue I want to caution you. This should be considered a more aggressive trade.

I am suggesting we wait for GG to close above $34.25. If the stock closes above $34.25 we'll buy call the next day. Use a stop loss at $31.80. Our long-term target is $42.00.

Breakout trigger: Wait for a close above $34.25
Use a stop loss at $31.80, keep position size small to limit risk.

BUY the 2014 Jan $40 call (GG1418a40) current ask $1.50

- or -

BUY the 2015 Jan $40 call (GG1517a40) current ask $3.60

Chart of GG:

Originally listed on the Watch List: 03/30/13


Under Armour, Inc. - UA - close: 51.20

Company Info

UA's much larger rival Nike (NKE) recently surged to new highs on better than expected earnings. Meanwhile shares of UA are consolidating sideways under resistance near $52.00 and its simple 200-dma. If you look you'll notice that traders have been buying the dips. UA is coiling for a bullish breakout past resistance. A move past $52.00 would create a brand new triple-top breakout buy signal on UA's point & figure chart. It's also worth noting that UA has relatively high short interest at 18% of the 79.8 million share float. A breakout past resistance could also fuel some short covering.

Normally I would wait for UA to close above resistance, in this case $52.00, before initiating positions (actually more like $52.50). Yet because of the high short interest I am suggesting an intraday trigger to buy calls if UA trades at $52.50 or higher. If triggered we'll use a stop loss at $47.45. Our long-term target is $59.75.

Breakout trigger: $52.50 (intraday trigger, small positions)

BUY the 2014 Jan $60 call (UA1418A60) current ask $2.85

Chart of UA:

Originally listed on the Watch List: 03/30/13


Active Watch List Candidates:



Cypress Semiconductor - CY - close: 11.03

Comments:
03/30/13: It was a quiet week for CY with the stock hovering near $11 and its 200-dma. We are still waiting on a big move higher.

Earlier Comments:
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)

BUY the 2015 Jan $15 call (CY1517a15)

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


The Estee Lauder Companies - EL - close: 64.03

Comments:
03/30/13: EL failed to impress last week. Shares churned sideways in the $63-64 zone. I am removing EL as a watch list candidate. The trigger was a close over $66.55. Our trade did not open.

Trade did not open.

03/30/13 removed from the watch list
03/09/13 keep positions small to start!

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