New Watch List Entries

DG - Dollar General

GE - General Electric

PG - Procter & Gamble

YUM - Yum! Brands Inc.


Active Watch List Candidates

KMB - Kimberly-Clark

ODFL - Old Dominion Freight Lines

PFE - Pfizer Inc.


Dropped Watch List Entries

None.



New Watch List Candidates:


Dollar General Corp. - DG - close: 55.79

Company Info

DG is in the discount, variety store industry. They are up to more than 10,600 stores in over 40 states. The stock saw a painful gap down in early June after management lowered their guidance. Shares have since managed to recoup all of its losses and more. Investors could be betting on higher gas prices and lower wages and fewer full time jobs to cut into consumer spending. That could drive consumers to discount stores like DG.

The current rally has pushed shares toward major resistance near $56.00. The all-time high was hit last summer (2012) at $56.04. I am suggesting we wait for DG to close above $56.50. If that entry requirement is met then we can buy calls the next morning with a stop loss at $52.45. Our long-term target is $64.00 for the 2014 calls. Our target is $69.00 for the 2015 calls.

FYI: The point & figure chart is bullish with a $78.00 target.
DG is due to report earnings in early September.

Breakout trigger: Wait for DG to close above $56.50
Then buy calls the next day. Stop loss @ 52.45.

BUY the 2014 Jan $60 call (DG1418a60) current ask $3.40

- or -

BUY the 2015 Jan $70 call (DG1517a70) current ask $3.60

Chart of DG:

Originally listed on the Watch List: 08/04/13


General Electric - GE - close: 24.70

Company Info

GE used to be considered a proxy for the market because it had its hands in so many different industries. The stock remains a bellwether and right now the long-term up trend is bullish. If Wall Street really believes that growth is going to pick up in the second half of 2013 then GE should benefit.

On a short-term basis GE has been consolidating sideways since its post-earnings spike higher about two weeks ago. There is overhead resistance at the $25.00 level. I am suggesting we wait for GE to close above $25.25 and then buy calls the next day with a stop loss at $22.90. More conservative investors might want to use a stop closer to $24 instead. Our long-term target is $30.00.

Breakout trigger: Wait for GE to close above $25.25
Then buy calls the next day. Stop loss @ 22.90.

BUY the 2014 Jan $25 call (GE1418a25) current ask $0.91

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BUY the 2015 Jan $30 call (GE1517a30) current ask $0.52

Chart of GE:

Originally listed on the Watch List: 08/04/13


Procter & Gamble Co. - PG - close: 81.29

Company Info

PG is a major company in the consumer goods sector. If investors really believe the global economy is going to see improvement then PG should benefit. They sell their merchandise in 180 countries.

After consolidating sideways for almost three weeks, PG looks poised to breakout past resistance and its all-time highs near $82.50. I am suggesting we wait for PG to close above $83.00 and then buy calls the next day with a stop loss at $79.25. Our target to exit the 2014 calls is at $89.00. Our target to exit the 2015 calls is $98.00.

FYI: PG's point & figure chart is bullish and is forecasting a $97 target.

Breakout trigger: Wait for PG to close above $83.00
Then buy calls the next day. Stop loss @ 79.25.

BUY the 2014 Jan $85 call (PG1418a85) current ask $1.50

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BUY the 2015 Jan $90 call (PG1517a90) current ask $2.81

Chart of PG:

Originally listed on the Watch List: 08/04/13


Yum! Brands - YUM - close: 74.39

Company Info

YUM runs a global fast-food empire with major brands like Taco Bell, KFC, and Pizza Hut. They have 39,000 locations in 125 countries. The stock has been relatively volatile this year but the overall trend is bullish with investors buying on weakness. This trend has finally pushed YUM up against major resistance at the $75.00 level. A breakout here could signal the next major move higher.

I am suggesting we wait for YUM to close above $75.25. Once that occurs we'll buy calls the next morning with a stop loss at $69.75. You may want to use a tighter stop. Our long-term target is $89.00. FYI: The P&F chart is bullish with a $94 target.

Breakout trigger: Wait for YUM to close above $75.25
Then buy calls the next day. Stop loss @ 69.75.

BUY the 2015 Jan $85 call (YUM1517a85) current ask $4.05

Chart of YUM:

Originally listed on the Watch List: 08/04/13


Active Watch List Candidates:



Kimberly-Clark - KMB - close: 99.61

Comments:
08/04/13: It was a relatively quiet week for KMB. Shares did test resistance at the $100 level on Thursday. The stock is inching closer to a bullish breakout past this level. There is no change from last week's comments.

I am suggesting a trigger to buy calls if KMB can close above $102.00. Once it closes above $102.00 we'll buy calls the next day. Our long-term target is $115.00.

Breakout trigger: Wait for KMB to close above $102.00
buy calls the next day. Start with a stop loss at $95.75

BUY the 2014 Jan $105 call (KMB1418a105) current ask $1.65

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BUY the 2015 Jan $110 call (KMB1517a110) current ask $3.50

Originally listed on the Watch List: 07/28/13


Old Dominion Freight Line - ODFL - close: 44.71

Comments:
08/04/13: ODFL hit new all-time highs this past week but failed to meet our entry point requirements. Thursday's rally left ODFL sitting at $45.21. Yet our entry trigger is a close above $45.25. If ODFL sees any follow through higher this week we will likely be triggered.

Earlier Comments:
I am suggesting investors wait for ODL to close above $45.25 then buy calls the next day with a stop loss at $41.95. Our long-term target is $54.00.

Breakout trigger: Wait for ODFL to close above $45.25
buy calls the next day. Start with a stop loss at $41.95

BUY the 2014 Jan $50 call (ODFL1418a50) current ask $1.35

Originally listed on the Watch List: 07/28/13


Pfizer Inc. - PFE - close: 29.37

Comments:
08/04/13: PFE reported earnings on July 30th that beat estimates by a penny. Revenues were a miss. The stock reacted with a spike above resistance at the $30.00 level. Yet shares failed to close above the $30 mark. More aggressive investors might want to buy calls on a dip near the 150-dma. I am still suggesting investors wait for PFE to close above $30.25. If that occurs we can launch positions the next morning. We'll start with a stop loss at $28.45. Our long-term target is $35.00.

FYI: That's not a typo. At $29.37, PFE is unchanged for the week.

Breakout trigger: Wait for PFE to close above $30.25
buy calls the next day. Start with a stop loss at $28.45

BUY the 2014 Jan $30 call (PFE1418a30)

- or -

BUY the 2015 Jan $30 call (PFE1517a30)

Originally listed on the Watch List: 07/28/13