New Watch List Entries

NTAP - NetApp, Inc.

V - Visa


Active Watch List Candidates

EL - The Est

MRVL - Marvell Technology


Dropped Watch List Entries

HON & LOW graduated to the active play list.



New Watch List Candidates:


NetApp, Inc. - NTAP - close: 36.15

Company Info

NTAP is in the networked storage solutions business. The stock has been underperforming the rest of the technology sector. Yet it looks like NTAP has finally found a bottom. The stock's recent strength has lifted NTAP toward resistance in the $36-37 area. We want to be ready for the stock's breakout to new 52-week highs.

I am suggesting we wait for NTAP to close above $37.15. If that occurs we'll buy calls the next morning with a stop loss at $34.45. Our long-term target is $44.75.

NOTE: Cisco Systems (CSCO) is a major player in the networking and technology space and CSCO's earnings on May 15th could influence trading in NTAP.
Furthermore NTAP is scheduled to report earnings on May 21st. More conservative investors may want to wait until after we see how the market reacts to NTAP's results before initiating any new positions.

FYI: NTAP's point & figure chart is bullish with a $58 target.

Breakout trigger: Wait for a close above $37.15, buy calls the next day.
stop loss @ 34.45.

BUY the 2014 Jan $40 call (NTAP1418A40) current ask $1.46

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BUY the 2015 Jan $40 call (NTAP1517A40) current ask $2.99

Chart of NTAP:

Originally listed on the Watch List: 05/11/13


Visa Inc. - V - close: 178.75

Company Info

Visa is a giant in the realm of retail electronic payments, whether that be on a credit card or debit card. When the company reported earnings on May 1st they beat estimates by 11 cents. Management raised their 2013 earnings forecast. Shares surged on the news to $180 but since then the stock has stalled. I suspect Visa is about to see some profit taking and we want to be ready to buy the dip.

I am suggesting we buy calls on a dip at $171.00. More nimble traders could try and target an entry point on a dip near the 30, 40, or 50-dma instead. If we are triggered at $171.00 I am suggesting a stop loss at $164.75. Our long-term target is $198.50.

FYI: Visa will begin trading ex-dividend on May 15th. The quarterly dividend should be about 33 cents.

Buy-the-Dip trigger: $171.00

BUY the 2014 Jan $180 call (V1418A180) current ask $5.70

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BUY the 2015 Jan $200 call (V1517A200) current ask $7.40

Chart of V:

Originally listed on the Watch List: 05/11/13


Active Watch List Candidates:



The Est - EL - close: 71.05

Comments:
05/11/13: It was a quiet news week for EL. The stock was underperforming the market with a slow drift lower. That changed on Friday with a big bounce off its rising 20-dma. Once again EL looks poised to rally towards $72.00.

Earlier Comments:
I'm suggesting we wait for EL to close above $72.00. If EL can close above $72.00 we'll initiate positions the next morning with a stop loss at $65.90. Our long-term target is $90.00. Currently the point & figure chart is bullish with a $93 target. We want to keep our position size small to limit our risk.

NOTE: 2015 calls are available but the spreads are significantly wider.

Breakout trigger: Wait for a close above $72.00, buy calls the next day.
stop loss @ 65.90.

BUY the 2014 Jan $80 call (EL1418A80) current ask $1.95

Originally listed on the Watch List: 05/04/13


Marvell Technology - MRVL - close: 10.93

Comments:
05/11/13: MRVL eked out a gain for the week thanks to a +1.2% advance on Friday. I am concerned that MRVL is underperforming its peers in the semiconductor sector. Furthermore the semis look very overbought and due for a correction. How will shares of MRVL perform if its sector is retreating? On a positive note Friday's session did see MRVL closed above technical resistance at its simple 300-dma and the stock looks poised to break out past resistance near $11.00.

I am leaving our strategy unchanged but I am suggesting that we keep our position size small to limit our risk. I am suggesting a trigger to buy calls at $11.25. No waiting for a close above resistance. I'm suggesting calls on an intraday move to $11.25 or higher. If triggered our long-term target is $15.00.

NOTE: MRVL is due to report earnings on May 23rd. More conservative traders will want to seriously consider waiting until after we see MRVL's results and how the market reacts to them before initiating any positions.

*Small Positions*

Breakout trigger: $11.25, stop loss @ 10.25

BUY the 2014 Jan $13 call (MRVL1418A13) current ask $0.43

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BUY the 2015 Jan $15 call (MRVL1517A15) current ask $0.68

Originally listed on the Watch List: 05/04/13