New Watch List Entries

AIG - Amer. Intl. Group

DIS - Walt Disney

GM - General Motors


Active Watch List Candidates

C - Citigroup Inc

CS - Credit Suisse

EL - The Est

JPM - JPMorgan Chase & Co

V - Visa

WDC - Western Digital Corp


Dropped Watch List Entries

None.



New Watch List Candidates:


American Intl. Group - AIG - close: 44.46

Company Info

AIG is another stock in the financial sector except this company focuses on insurance. The long-term trend is up. Yet short-term the stock looks poised for a pullback. The pullback from last week's high appears to be a bearish double top. I am expecting AIG to correct lower into the $40.00-37.00 zone.

We are adding AIG as a watch list candidate with an entry trigger to buy the dip at $38.50. If triggered at $38.50 we'll use a stop loss at $34.75. Our long-term target is the $45-50 zone.

Buy-the-Dip trigger: $38.50, stop loss @ 34.75

BUY the 2014 Jan $45 call (AIG1418a45) current ask $4.30

- or -

BUY the 2015 Jan $50 call (AIG1517a50) current ask $5.60

Chart of AIG:

Originally listed on the Watch List: 06/01/13


Walt Disney - DIS - close: 63.08

Company Info

DIS is a media and entertainment giant. They own and operate TV networks, a radio network, a movie studio, and an amusement park empire. Shares have been a consistent winner for months. Yet it looks like the rally peaked a couple of weeks ago. We want to be ready to buy the dip but I suspect there is still more profit taking ahead.

Use an entry trigger to buy calls on a dip at $57.00. If triggered we'll use a stop loss at $53.75. Our long-term target is the $75-80 zone.

Buy-the-Dip trigger: $57.00, stop @ 53.75

BUY the 2014 Jan $65 call (DIS1418a65) current ask $3.65

- or -

BUY the 2015 Jan $65 call (DIS1418a65) current ask $6.70

Chart of DIS:

Originally listed on the Watch List: 06/01/13


General Motors - GM - close: 33.89

Company Info

Investors have been bullish on the auto makers. The industry is expected to sell 15.0 million cars this year. Bullish expectations have pushed shares of GM and F to new 18-month highs. We want to hop on board but we don't want to chase the rally. With the stock market looking like it's about to correct lower we've got eyes on a buy-the-dip trade for GM.

Use a buy-the-dip trigger at $30.00 to launch call positions on GM. If triggered we'll use a stop loss at $27.75. Our long-term target is the $36-40 zone.

Buy-the-Dip trigger: $30.00, stop @ 27.75

BUY the 2014 Jan $35 call (GM1418a35) current ask $2.72

BUY the 2015 Jan $35 call (GM1517a35) current ask $4.90

Chart of GM:

Originally listed on the Watch List: 06/01/13


Active Watch List Candidates:



Citigroup, Inc. - C - close: 51.99

Comments:
06/01/13: The financial sector continues to show relative strength. Yet the banking stocks will not be immune to a market correction lower. I do not see any changes from my prior comments. 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)

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


Credit Suisse Group - CS - close: 29.44

Comments:
06/01/13: Shares of CS are holding up pretty well. The stock did manage a gain for the week. Yet shares remain below resistance in the $30.00-30.50 zone. I am adjusting our entry point strategy. Wait for CS to close above $30.75 before initiating positions the next morning.

Earlier Comments:
If the stock closes above our trigger 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 $30.75, 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)

06/01/13 adjust entry point: wait for a close above $30.75

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


The Est - EL - close: 67.78

Comments:
06/01/13: We have been waiting for a pullback in shares of EL. It looks like the correction has begun. The stock underperformed the market last week. I am expecting a dip to $65.00, a level that should be support. Please note that I am adjusting our entry point to buy calls on a dip at $65.00. I am also adding the 2015 calls as an alternative trade.

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.

Buy-the-dip strategy at $65.00, stop loss at $62.25

BUY the 2014 Jan $75 call (EL1418A75) current ask $2.55

- or - BUY the 2015 Jan $75 call (EL1517A75) current ask $2.55

06/01/13 adjust the entry trigger to $65.00 (from 65.50)
add the 2015 calls options
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


JPMorgan Chase & Co. - JPM - close: 54.59

Comments:
06/01/13: After an impressive four-week rally it looks like JPM might be running out of gas. Shares may have just reversed at the $56.00 level. I am expecting a correction back toward $50.00, which should be significant support.

We want to be ready to buy calls on a dip near 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)

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


Visa Inc. - V - close: 178.14

Comments:
06/01/13: Visa's pullback last week was pretty mild. I am still expecting a correction toward the $170.00 level. We want to buy 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: 63.32

Comments:
06/01/13: WDC continues to impress with another gain. The stock has extended its gains to six weeks in a row. We want to buy calls on a correction.

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