Editor's Note:

Our watch list continues to work well with three more candidates graduating to the active play list last week (FLR, NVDA, and SJM). You will also notice that Intel (INTC) is missing. INTC met our entry requirement on Friday at the close so we're moving to the new plays section.

Tonight we're adding a couple of candidates with a buy-the-dip entry point strategy.



New Watch List Entries

FCX - Freeport McMoRan

WAG - Walgreen Co.


Active Watch List Candidates

DD - E.I. du Pont

KMX - CarMax Inc.

VRSN - VeriSign, Inc.


Dropped Watch List Entries

FLR, NVDA, and SJM have graduated to the active play list.
INTC met our entry point on Friday and has been moved to the new plays section.



New Watch List Candidates:


Freeport-McMoRan - FCX - close: 33.04

Company Info

FCX is a miner. The company producers copper and gold and a number of other precious and industrial metals. The recent pullback in gold and copper prices has not stopped the rally in FCX shares. Investors could be betting on improving economic data out of China as a precursor to stronger demand for copper.

This past week has seen FCX breakout past resistance near $32.00 and both its simple and exponential 200-dma. FCX has also broken one of its long-term trend lines of resistance (see weekly chart). I suspect FCX is going to see a pullback and retest the $32 level. Tonight I am suggesting we launch small bullish positions if FCX trades at $32.00 again. We'll try and limit our risk with a stop loss at $29.45. Our long-term target is the $38-40 zone but we'll adjust it as the play progresses.

Buy-the-Dip trigger: $32.00, small positions!
start with a stop loss at $29.45.

BUY the 2014 Jan $35 call (FCX1418a35) current ask $1.44

- or -

BUY the 2015 Jan $34 call (FCX1517a34) current ask $3.85

Chart of FCX:

Weekly Chart of FCX:

Originally listed on the Watch List: 09/15/13


Walgreen Co. - WAG - close: 53.46

Company Info

Walgreens currently operates over 8,000 drugstores across the U.S. and they're growing after last week's announcement it was buying privately held Kerr Drug, a regional pharmacy chain in North Carolina. Shares of WAG also garnered some bullish analyst comments that helped lift shares past resistance to new all-time highs. The company's latest same-store sales came in at +4.8%, which was way above estimates of +3.4%.

We do not want to chase WAG here. Odds are good that we could see WAG retest prior resistance as new support. Therefore I am suggesting we buy calls on a dip at $51.50. If triggered I am suggesting a stop loss at $47.40, just below technical support at the rising 150-dma. Our target to exit the 2014 calls is $59.50. Target to be determined for the 2015 calls.

Please note that more conservative investors may want to wait a couple of weeks before considering new positions. WAG is scheduled to report earnings on October 1st. You might want to wait and see how the market chooses to interpret WAG's results before initiating positions.

Buy-the-Dip trigger: $51.50, use a stop at $47.40

BUY the 2014 Jan $55 call (WAG1418a55) current ask $2.40

- or -

BUY the 2015 Jan $60 call (WAG1517a60) current ask $3.70

Chart of WAG:

Originally listed on the Watch List: 09/15/13


Active Watch List Candidates:



E.I. du Pont - DD - close: 58.88

Comments:
09/15/13: After a four-week correction lower shares of DD have managed a two-week bounce. This past week saw the rebound accelerate higher. More aggressive investors could buy this bounce with a stop under $56.00. I am suggesting we stick to our plan and wait for a breakout past $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


CarMax Inc. - KMX - close: 51.08

Comments:
09/15/13: KMX has seen profit taking three days in a row. Yet the actually selling has been pretty mild, which is encouraging. I don't see any changes from my earlier comments.

NOTE: KMX is scheduled to report earnings on September 24th. Cautious investors may want to wait until after we see how the market reacts to KMX's results before launching positions, regardless of if this stock hits our suggested entry trigger.

Earlier Comments:
More aggressive investors may want to buy calls now. I am suggesting we wait and buy calls on a dip at $50.00. If triggered we'll try and limit our risk with a stop loss at $46.40. Our long-term target is $59.00

Buy-the-Dip trigger: $50.00

BUY the 2014 Jan $55 call (KMB1418a55) current ask $1.90

Originally listed on the Watch List: 09/08/13


VeriSign, Inc. - VRSN - close: 49.85

Comments:
09/15/13: The two-week rebound has lifted VRSN back toward major resistance at the $50.00 level. The rally has clearly stalled over the last couple of days. I do want to make one change to our strategy. Wait for VRSN to close above $50.50 before initiating positions.

Earlier Comments:
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 $50.50
then buy calls the next morning. Start with a stop at $47.40.

BUY the 2014 Jan $55 call (NVDA1418a55) current ask $0.79

- or -

BUY the 2015 Jan $55 call (NVDA1517a55) current ask $3.75

09/15/13 adjust entry trigger: wait for a close over $50.50 instead of $50.25

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