New Watch List Entries

HAL - Halliburton Co.

KORS - Michael Kors Holdings

NVDA - NVIDIA Corp.

VRSN - VeriSign, Inc.


Active Watch List Candidates

DD - E.I. du Pont

DG - Dollar General

FLR - Fluor Corp.

GE - General Electric

PFE - Pfizer Inc.

PG - Procter & Gamble

YUM - Yum! Brands Inc.


Dropped Watch List Entries

ODFL graduated to the play list.
KMB has been removed.



New Watch List Candidates:


Halliburton Company - HAL - close: 46.95

Company Info

HAL is in the oil services industry. The stock has been very resilient. While most of the market has been in sell-off mode HAL has been quietly consolidating sideways near two-year highs. Traders have continued to buy the dips and HAL now looks poised to breakout past resistance near $47.00.

I am suggesting we wait for HAL to close above $47.25 and then buy calls the next day with a stop; loss at $43.75. If triggered our target for the 2014 calls is $52.50. Our target for the 2015 calls is $56.50. Currently the Point & Figure chart is bullish with a $62 target.

Breakout trigger: Wait for a close above $47.25, then buy calls the next day.
start with a stop loss at $43.75.

BUY the 2014 Jan $50 call (HAL1418a50) current ask $1.79

- or -

BUY the 2015 Jan $50 call (HAL1517a50) current ask $4.75

Chart of HAL:

Originally listed on the Watch List: 08/18/13


Michael Kors Holdings - KORS - close: 70.20

Company Info

KORS is a specialty retailer that sells luxury goods including apparel, handbags and accessories. Sales are booming with the latest earnings report showing net profits up +79%, same-store sales up +27% and top line revenues up +52%. Clearly the high-end consumer shopping at KORS is doing just fine. The stock hit new all-time highs earlier this week but the rash of negative retail news has sparked some profit taking. We want to be ready to buy the dip if the profit taking continues.

Broken resistance near $65.00 should be new support. I am suggesting we buy calls if KORS can trade down to $66.00. We'll start with a stop loss at $62.00 but more aggressive traders may want to put their stop below the $60.00 mark instead. Our bullish target to exit the 2014 calls is $74.50. Our target to exit the 2015 calls is $84.50. Currently the point & figure chart is bullish with an $82 target.

Buy-the-Dip trigger: $66.00

BUY the 2014 Jan $70 call (KORS1418a70)

- or -

BUY the 2015 Jan $75 call (KORS1517a75)

Chart of KORS:

Originally listed on the Watch List: 08/18/13


NVIDIA Corp. - NVDA - close: 15.19

Company Info

The last couple of weeks have been volatile for NVDA as investors react to the latest earnings report. NVDA reported bottom line earnings of 16 cents a share for the second quarter. That was four cents better than expected. Yet management lowered their Q3 guidance. The company is doing well with their graphic processors for the higher-end gaming PCs and graphic heavy users yet slowing PC sales remain a big picture issue. Bears are also worried about disappointing growth in NVDA's Tegra line of chips for the smartphone and tablet market.

If study the stock's recent performance then investors are buying the news following its earnings report. Volume has been surging on the post-earnings really. NVDA has been stuck inside the $14-15 trading range for almost three months and looks poised to breakout. There was an intraday spike in June near $15.50 and the stock traded up to $15.40 on Friday. We suspect a breakout past $15.50 could be a new entry point.

Due to NVDA's recent volatility I am labeling this a more aggressive, higher-risk trade and thus suggest we use smaller positions to limit our risk. The suggested entry point is to wait for NVDA to close above $15.50 and then buy calls the next day with a stop loss at $14.25. Our target to exit the 2014 calls is $18.00. Our target to exit the 2015 calls is $19.75. Currently the point & figure chart is bullish and forecasting at $23 target.

Breakout trigger: Wait for a close above $15.50
then buy calls the next morning. Start with a stop at $14.25.

BUY the 2014 Jan $16 call (NVDA1418a16) current ask $0.83

- or -

BUY the 2015 Jan $17 call (NVDA1517a17) current ask $1.46

Chart of NVDA:

Originally listed on the Watch List: 08/18/13


VeriSign, Inc. - VRSN - close: 48.72

Company Info

VRSN provides Internet infrastructure services including domain name services. The stock has been showing relative strength since its earnings report in late July where VRSN beat estimates and raised their revenue guidance. VRSN is now approaching major resistance near the $50.00 level. A breakout could signal a significant move higher.

I am suggesting we wait for VRSN to close above $50.25 and then buy calls the next day. More aggressive traders may want to jump in on an intraday trade at $50.25 because VRSN has above average short interest and a breakout past $50.00 could spark some short covering. If VRSN meets our entry requirement I am suggesting a stop loss at $47.40. Our target to exit the 2014 calls is $57.50. Our target to exit the 2015 calls is $64.50. Currently the point & figure chart is bullish with a $76 target.

Breakout trigger: Wait for a close above $50.25
then buy calls the next morning. Start with a stop at $47.40.

BUY the 2014 Jan $55 call (NVDA1418a55) current ask $0.76

- or -

BUY the 2015 Jan $55 call (NVDA1517a55) current ask $3.35

Chart of VRSN:

Originally listed on the Watch List: 08/18/13


Active Watch List Candidates:



E.I. du Pont - DD - close: 58.28

Comments:
08/18/13: DD gave up less than two points for the week. I don't see any changes from my comments last weekend. If the correction continues then we'll re-evaluate our entry point strategy next weekend. For now I am suggesting we wait for DD to close above $60.50 and then buy calls the next morning with a stop loss at $57.90. Our long-term target is $69.00.

Breakout trigger: Wait for DD to close above $60.50
Then buy calls the next day. Stop loss @ 57.90.

BUY the 2014 Jan $65 call (DD1418a65)

- or -

BUY the 2015 Jan $65 call (DG1517a65)

Originally listed on the Watch List: 08/11/13


Dollar General Corp. - DG - close: 52.47

Comments:
08/18/13: Shares of DG also fell less than $2.00 for the week although the sell-off here looks a bit uglier. DG has broken down below its 50-dma and closed Friday sitting on its 100-dma. If DG can test support near $50.00 we will re-evaluate our entry point strategy. In the meantime our plan is unchanged.

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)

- or -

BUY the 2015 Jan $70 call (DG1517a70)

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


Fluor Corp. - FLR - close: 66.19

Comments:
08/18/13: FLR still looks encouraging. Shares have managed to ignore most of the market's recent weakness. Instead FLR continues to consolidate sideways. We suspect shares are coiling for a breakout higher. There is no change from last week's comments.

Earlier Comments:
Shares are currently hovering below resistance in the $66-67 level. This also happens to be the neckline of an inverse or bullish reversion of a head-and-shoulders pattern. A breakout past this level would forecast a rally toward the 2011 highs. The Point & Figure chart is even more bullish with an $82 target.

I am suggesting we wait for FLR to close above $67.00 and then buy calls the next morning. If triggered we'll start with a stop loss at $63.75. Our long-term target is $74.75.

Breakout trigger: Wait for FLR to close above $67.00
Then buy calls the next day. Stop loss @ 63.75.

BUY the 2014 Jan $70 call (FLR1418a70)

- or -

BUY the 2015 Jan $75 call (FLR1517a75)

Originally listed on the Watch List: 08/11/13


General Electric - GE - close: 23.95

Comments:
08/18/13: The slow fade lower in GE continues. The stock is down three out of the last four weeks. If this trend continues we could see GE retest the $23 area. We will re-evaluate our entry strategy if GE does near $23 or its 200-dma. Otherwise our plan is unchanged.

Earlier Comments:
We want to 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)

- or -

BUY the 2015 Jan $30 call (GE1517a30)

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


Kimberly-Clark - KMB - close: 94.94

Comments:
08/18/13: KMB has displayed relative weakness with a sharp four-day decline. It is possible that shares will find support near $94 and their 200-dma. Yet I wouldn't buy calls at this time. Tonight we are removing KMB as a watch list candidate.

Trade did not open.

08/18/13 removed from the watch list

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


Pfizer Inc. - PFE - close: 28.37

Comments:
08/18/13: PFE is correcting lower after breaking down from a two-week consolidation near $29 and its 100-dma. The stock's long-term up trend should coincide with a dip near $28.00 (or possibly the 200-dma near $27.65). We will re-evaluate our entry point strategy if we see PFE hold that level of support. Until then we're waiting for PFE to move higher.

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.

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


Procter & Gamble Co. - PG - close: 79.90

Comments:
08/18/13: Higher-dividend defensive names were targets for sellers last week. PG was no exception. Shares tested their 50 and 100-dma on Friday. If PG closes below $78.00 we'll likely drop the stock as a bullish candidate. In the meantime we are waiting for a new high.

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)

- or -

BUY the 2015 Jan $90 call (PG1517a90)

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


Yum! Brands - YUM - close: 72.16

Comments:
08/18/13: Disappointing same-store sales from its Chinese stores sent shares of YUM lower last week. Yet traders bought the dip near its rising 50-dma. At the moment our plan has not changed.

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)

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