New Watch List Entries

C - Citigroup Inc

JPM - JPMorgan Chase & Co


Active Watch List Candidates

CS - Credit Suisse

EL - The Est

V - Visa

WDC - Western Digital Corp


Dropped Watch List Entries



New Watch List Candidates:


Citigroup, Inc. - C - close: 50.52

Company Info

The financial sector has helped lead this market higher. This past week looks like a bearish reversal for many of the banking stocks. Yet it's probably just a short-term correction lower. We want to take advantage of any profit taking and be ready to buy the dip.

I suspect that Citigroup will find support near $45.00 and its 100-dma. I am suggesting a buy-the-dip trigger at $46.00 and we'll use a stop loss at $42.40. If triggered we want to start with small positions. Our long-term target is $59.00.

Buy-the-Dip trigger: $46.00, stop loss @ 42.40

BUY the 2014 Jan $50 call (C1418a50)

- or -

BUY the 2015 Jan $55 call (C1517a55)

Chart of C:

Originally listed on the Watch List: 05/25/13


JPMorgan Chase & Co. - JPM - close: 53.66

Company Info

JPM is another major bank that has shown relative strength in the month of May. This past week may have been a bearish reversal in the stock. We want to be ready to buy calls on a dip near support. The $50.00 level should offer some round-number support. I am suggesting a buy-the-dip trigger at $50.25. If triggered we will use a stop loss at $47.40. Our long-term target is $64.00.

Buy-the-Dip trigger: $50.25, stop 47.40

BUY the 2014 Jan $55 call (JPM1418a55)

- or -

BUY the 2015 Jan $55 call (JPM1517a55)

Chart of JPM:

Originally listed on the Watch List: 05/25/13


Active Watch List Candidates:



Credit Suisse Group - CS - close: 29.27

Comments:
05/25/13: It was not a surprised to see CS retreat from resistance near $30 thanks to the broader market's pullback. Shares could bounce near their 50-dma and 100-dma at the $28 level. Yet I am suggesting we wait for a clear breakout higher.

Earlier Comments:
I am suggesting we wait for CS to close above $30.65. If the stock closes above this level we can buy calls the next day with a stop loss at $27.75. More conservative investors may want to use a stop closer to $29.00 instead. We do want to keep our position size small since I consider this a more aggressive entry point given the market's major indices look over extended.

If triggered our long-term target is the $37.50-40.00 zone. The Point & Figure chart has a long-term target of $57.50.

Breakout trigger: Wait for a close above $30.65, then buy calls the next day
Use a stop loss at $27.75

BUY the 2014 Jan $33 call (CS1418a33)

- or -

BUY the 2015 Jan $35 call (CS1517a35)

Originally listed on the Watch List: 05/18/13


The Est - EL - close: 70.95

Comments:
05/25/13: EL is holding up reasonably well but momentum seems to be slowing down. Overall I do not see any changes from my prior comments. I am suggesting we wait for a dip and buy calls on a pullback at $65.50.

Earlier Comments:
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.

Buy-the-dip strategy at $65.50, stop loss at $62.25

BUY the 2014 Jan $75 call (EL1418A75) current ask $3.50

05/18/13 strategy change: switch entry point to buy-the-dip at $65.50, move the stop loss to $62.25. Move the option strike to 2014 Jan $75 call

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


Visa Inc. - V - close: 180.45

Comments:
05/25/13: Visa was not immune to the market's pullback this past week. Shares almost appear to have formed a short-term bearish double to near $185.00. Overall I don't see any changes from my prior comments.

I am suggesting we buy calls on a dip at $171.00. If we are triggered at $171.00 I am suggesting a stop loss at $164.75. Our long-term target is $198.50.

Buy-the-Dip trigger: $171.00

BUY the 2014 Jan $180 call (V1418A180)

- or -

BUY the 2015 Jan $200 call (V1517A200)

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


Western Digital Corp. - WDC - close: 62.30

Comments:
05/25/13: WDC continues to show impressive relative strength with another surge to all-time highs. We still do not want to chase it.

I am suggesting we wait and buy a dip at $55.00. If WDC hits our buy-the-dip trigger at $55.00 our long-term target is $70.00. The Point & Figure chart is currently forecasting a long-term target of $82.00. We'll start with a stop loss at $52.25.

Buy-the-Dip trigger: $55.00, stop loss @ 52.25

BUY the 2014 Jan $65 call (WDC1418a65)

- or -

BUY the 2015 Jan $70 call (WDC1517a70)

Originally listed on the Watch List: 05/18/13