New Watch List Entries

DECK - Deckers Outdoor Corp.

HOG - Harley Davidson

STZ - Constellation Brands


Active Watch List Candidates

DD - E.I. du Pont

DG - Dollar General

FLR - Fluor Corp.

GE - General Electric

KORS - Michael Kors Holdings

NVDA - NVIDIA Corp.

PFE - Pfizer Inc.

PG - Procter & Gamble

VRSN - VeriSign, Inc.

YUM - Yum! Brands Inc.


Dropped Watch List Entries

HAL graduated from our watch list to our active play list.



New Watch List Candidates:


Deckers Outdoor Corp. - DECK - close: 59.56

Company Info

DECK makes footwear and apparel for outdoor activities. The stock has been volatile the last few weeks but the trend is higher with traders buying the dips. Recently DECK has been showing relative strength and is on the verge of a bullish breakout past major resistance near $60.00.

I am suggesting we wait for DECK to close above $60.50 and then buy calls the next day with a stop loss at $55.75. However, I am putting a limit on this entry point. Do not open positions if DECK closes above $62.00. More aggressive traders could an intraday trigger instead waiting for a close above $60.50. If triggered our target is $74.00. FYI: The point & figure chart is forecasting a bullish target of $87.00.

We want to keep our position size small to limit our risk. DECK can be a volatile stock.

Breakout trigger: Wait for DECK to close above $60.50
Then buy calls the next day. Stop loss @ 55.75.
* do NOT launch positions if DECK closes above $62.00. *

BUY the 2014 Jan $65 call (DECK1418a65) current ask $3.70

- or -

BUY the 2015 Jan $70 call (DECK1517a70) current ask $7.40

Chart of DECK:

Originally listed on the Watch List: 08/25/13


Harley-Davidson - HOG - close: 59.84

Company Info

The iconic American brand of motorcycles has seen a strong performance in its stock price. This past week has seen HOG breakout from a three-week trading range and close near multi-year highs. This is somewhat surprising given Wall Street's worries over a slowing U.S. consumer. The story lately would suggest that consumers are not spending money on apparel but instead are buying cars and electronics. Maybe the "buying cars" part also applies to vehicles like motorcycles.

I am suggesting we wait for HOG to close above $60.50 and then buy calls the next day with a stop loss at $56.75. However, I am putting a limit on this entry point. Do not open positions if HOG closes above $62.00. More aggressive traders could an intraday trigger instead waiting for a close above $60.50. If triggered our target is $69.00.

Breakout trigger: Wait for HOG to close above $60.50
Then buy calls the next day. Stop loss @ 56.75.
* do NOT launch positions if HOG closes above $62.00. *

BUY the 2014 Jan $65 call (HOG1418a65) current ask $1.73

- or -

BUY the 2015 Jan $70 call (HOG1517a70) current ask $3.80

Chart of HOG:

Originally listed on the Watch List: 08/25/13


Constellation Brands - STZ - close: 55.86

Company Info

STZ is an American manufacturer of wine and spirits. The company's latest earnings report was early July. They missed the estimate but raised their 2014 guidance. Since then investors bought the dip near $50 and its 100-dma. Now STZ is breaking out past resistance near $55 and hitting new all-time highs.

I am suggesting we wait for STZ to close above $56.25 a share. If that trigger is met we can buy calls the next day. There is a good chance STZ will meet that trigger on Monday or Tuesday this week. More nimble traders could try and wait for a dip near $55.00 instead, since broken resistance near $55.00 should be new support. I am suggesting a wide stop loss at $49.95 but more conservative types may want to use a stop closer to the $53.00 level. Our long-term target is the $65-70 zone.

Breakout trigger: Wait for STZ to close above $56.25
Then buy calls the next day. Stop loss @ 49.95.

BUY the 2014 Jan $60 call (STZ1418a60) current ask $1.80

- or -

BUY the 2015 Jan $65 call (STZ1517a65) current ask $4.10

Chart of STZ:

Originally listed on the Watch List: 08/25/13


Active Watch List Candidates:



E.I. du Pont - DD - close: 57.90

Comments:
08/25/13: Hmm... after dipping toward prior resistance (now new support) near $57.00, shares of DD are starting to bounce. More aggressive investors might want to consider launching small bullish positions here and adjust your stop loss. Officially the newsletter is waiting for a breakout past resistance near $60.00.

Earlier Comments:
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: 55.05

Comments:
08/25/13: DG displayed relative strength last week with a rally back toward its highs. The $56.00 area is major resistance and we're waiting for a breakout. Investors should note that DG is scheduled to report earnings on September 4th. More conservative traders may want to wait until after we see how the market reacts to DG's earnings before considering new positions, regardless of our suggested entry point below.

Earlier Comments:
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: 66.08

Comments:
08/25/13: FLR is still hovering inside the $64-67 trading range. There is no change from my earlier comments.

Earlier Comments:
Shares are currently hovering below resistance near the $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: 23.78

Comments:
08/25/13: The correction lower in shares of GE continues with the stock down three weeks in a row. We will re-evaluate our entry strategy if GE nears $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


Michael Kors Holdings - KORS - close: 72.57

Comments:
08/25/13: KORS is not cooperating with our buy-the-dip strategy. The stock has been showing relative strength and rallied back toward its highs set two weeks ago. More aggressive traders might want to consider buying calls if KORS can close above the $73.00 level. We are unwilling to chase it at this time and we will re-evaluate our entry point strategy next weekend.

Earlier Comments:
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)

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


NVIDIA Corp. - NVDA - close: 14.96

Comments:
08/25/13: Wow! I am surprised by the action in NVDA. The market saw an increase in volatility last week. Yet shares of NVDA were very quiet with the stock hovering on either side of the $15.00 level. On one hand NVDA's failure to follow the market lower is positive. Yet its failure to rally with the market is also a challenge.

Earlier Comments:
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)

- or -

BUY the 2015 Jan $17 call (NVDA1517a17)

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


Pfizer Inc. - PFE - close: 28.37

Comments:
08/25/13: I warned readers last week that PFE might be headed toward the $28.00 level. I am actually tempted to buy calls on this pullback in PFE. Yet shares underperformed the broader market last week and that could be a warning sign. I'm starting to wonder if PFE is going to test its 200-dma near $27.75 soon. We will re-evaluate our entry point strategy again next weekend. Until then we're waiting for a move above $30.00.

Earlier Comments:
I am 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: 80.01

Comments:
08/25/13: PG spent the week consolidating sideways. The takeaway here is that PG appears to have found new support near the $79.00 level.

Earlier Comments:
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


VeriSign, Inc. - VRSN - close: 49.50

Comments:
08/25/13: VRSN continues to inch higher. Friday's display of relative strength (+0.6%) was also a breakout from a multi-day consolidation in the $48.50-49.00 zone.

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 $0.83

- or -

BUY the 2015 Jan $55 call (NVDA1517a55) current ask $3.55

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


Yum! Brands - YUM - close: 72.57

Comments:
08/25/13: YUM didn't move much last week but I am encouraged. Shares have found support near $72.00 for the last week and a half. That could be a new short-term bottom of the stock. The next challenge for the bulls is a breakout past short-term resistance in the $73.00-73.25 zone.

Earlier Comments:
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