New Watch List Entries

DIS - The Walt Disney Co

NOV - National Oilwell Varco


Active Watch List Candidates

AVGO - Avago Technologies

CBI - Chicago Bridge & Iron

DD - E.I. du Pont

DKS - Dick's Sporting Goods

DLTR - Dollar Tree Inc.

FCX - Freeport McMoRan

WAG - Walgreen Co.


Dropped Watch List Entries

HAS has been removed.



New Watch List Candidates:


The Walt Disney Co. - DIS - close: 66.21

Company Info

DIS is a media giant with TV networks, movie studios, resorts and amusement parks. Right now content is king. 2013 has seen shares of DIS rally to new all-time highs. Yet the rally peaked in May. DIS has been stuck under resistance at the $68.00 level. The last few weeks have produced a sideways consolidation but now DIS is on the rebound.

We want to be ready if DIS can breakout past $68.00. I am suggesting we launch bullish positions if DIS can close above $68.05 but do not open positions if we see DIS close above $70.00 (we want to avoid buying a big spike higher or a gap open that's too high). If triggered with a close above $68.05 we'll start with a stop loss at $62.90. Our long-term target is $84.00.

FYI: DIS is due to report earnings on November 7th.

Breakout trigger: Wait for DIS to close above $68.05
buy calls the next day. use an initial stop at $62.90

BUY the 2015 Jan $75 call (DIS1517a75) current ask $3.15

Chart of DIS:

Originally listed on the Watch List: 10/13/13


National Oilwell Varco - NOV - close: 79.32

Company Info

NOV is in the oil services industry. They manufacture components for oil and gas drilling, supply oilfield services, and more. Shares have been somewhat resilient during the market's recent sell-off. NOV is essentially consolidating sideways in the $77-80 zone. A breakout past $80 could set up for a run towards resistance in the $90 area.

I am suggesting we wait for NOV to close above $80.25 and buy calls the next day with a stop loss at $76.75. We do not want to open positions if NOV closes above $82.00. If triggered our target is $89.75. The point & figure chart is bullish with a $91 target.

Bear in mind that NOV is scheduled to report earnings on October 25th. The stock could see profit taking on a disappointing report.

FYI: NOV is planning a spinoff of its oilfield production equipment business by late 2014. We will likely exit positions prior to the spinoff.

Breakout trigger: Wait for NOV to close above $80.25
buy calls the next day. use an initial stop at $76.75

BUY the 2015 Jan $90 call (NOV1517a90) current ask $4.75

Chart of NOV:

Originally listed on the Watch List: 10/13/13


Active Watch List Candidates:



Avago Technologies - AVGO - close: 43.29

Comments:
10/13/13: AVGO weathered the market's volatility last week pretty well. Traders bought the dip near $42.00 and now shares look poised to breakout to new highs. More aggressive investors might want to consider buying calls if AVGO can closed above $44.00. I am suggesting we wait for a deeper correction lower since there is still a risk of a market sell-off if our elected officials can't come to a deal on the U.S. debt ceiling.

Tonight we will adjust our buy-the-dip trigger to $40.50.

Earlier Comments:
I am suggesting a buy-the-dip entry point with a stop loss at $37.75. If triggered our long-term target is $45.00 for the 2014 January calls and $48.50 for the 2015 calls. FYI: The point & figure chart is bullish with a $49 target.

Buy-the-Dip trigger: $40.50, stop loss @ 37.75

BUY the 2014 Jan $42.50 call (AVGO1418a42.5)

- or -

BUY the 2015 Jan $45 call (AVGO1517a45) 10/13/13 adjust the buy-the-dip trigger from $40.00 to $40.50

Originally listed on the Watch List: 09/22/13


Chicago Bridge & Iron - CBI - close: 71.05

Comments:
10/13/13: CBI continues to show relative strength. Traders bought the dip near its rising 20-dma during the market's recent sell-off. The rebound has pushed CBI to a new all-time high. We still do not want to chase it.

FYI: CBI is due to report earnings on October 29th.

Earlier Comments:
I am suggesting a buy-the-dip trigger to buy calls at $66.00 since broken resistance near $65.00 should be support. Now there's no guarantee that CBI is going to produce this desired pullback but if it does, we want to be ready to take advantage of it.

If triggered at $66.00, we will start with a stop loss at $59.50. Our long-term target for the 2015 calls is $84. Our long-term target for the 2016 calls $94.

Buy-the-Dip trigger: $66.00

BUY the 2015 Jan $75 call (CBI1517a75)

- or -

BUY the 2016 Jan $80 call (CBI1615a80)

Originally listed on the Watch List: 10/06/13


E.I. du Pont - DD - close: 57.93

Comments:
10/13/13: DD underperformed the market and posted another weekly loss, its third in a row. Traders did buy the dip near its 100-dma. DD has earnings coming up on October 22nd. If shares can't breakout past resistance near $60.00 between now and October 25th then we'll likely drop it as a watch list candidate.

Earlier Comments:
We want to wait for DD to close above $60.75 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 $60.75
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)

09/22/13 adjust entry: wait for a close above $60.75
instead of a close above $60.50

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


Dick's Sporting Goods - DKS - close: 52.57

Comments:
10/13/13: DKS hit some profit taking last week. Shares remain relatively close to major resistance at the $54.00 level. We just need to be patient. There is no change from my prior comments.

Earlier Comments:
The stock has been consolidating sideways inside the $45-54 trading range for about a year and a half. The most recent bounce off the bottom of the range has produced a five-week rally. Now DKS is sitting just below major resistance. A breakout here could launch a significant move higher. The point & figure chart is already bullish and forecasting at $71 target.

DKS has failed at $54.25 more than once. I am suggesting we wait for DKS to close above $54.50 and then buy calls the next day with a stop loss at $49.95. Please note that I am putting a limit on this entry point. We do not want to initiate positions if we see DKS close above $56.50 so I'm giving the stock a $2.00 window for us to launch positions.

Buy-the-Dip trigger: Wait for DKS to close above $54.50
then buy calls the next day. use an initial stop at $49.95.

BUY the 2014 Jan $55.50 call (DKS1418a55.5)

- or -

BUY the 2015 Jan $60 call (DKS1517a60)

Originally listed on the Watch List: 10/06/13


Dollar Tree, Inc. - DLTR - close: 58.69

Comments:
10/13/13: Many of the retail-related stocks suffered last week. Yet profit taking in DLTR was relatively minor. We do not want to chase DLTR yet. I'd rather wait for a dip toward $55.00, which should be significant support.

Earlier Comments:
Shares of DLTR recently broke out past resistance near $55.00 and tagged new all-time highs. I am suggesting a buy-the-dip trigger at $55.25 with a stop loss at $51.50. Our long-term target is the $65 area. FYI: The point & figure chart is bullish with a $78 target.

Buy-the-Dip trigger: $55.25, stop loss @ 51.50

BUY the 2014 Jan $60 call (DLTR1418a60)

- or -

BUY the 2015 Jan $65 call (DLTR1517a65)

Originally listed on the Watch List: 09/22/13


Freeport-McMoRan - FCX - close: 33.44

Comments:
10/13/13: Hmm... we may want to adjust our entry trigger. In the last two weeks we have seen traders buy the dip in FCX three times in the $32.35 area. That's close to our suggested trigger at $32.00 but not close enough. I'm not making any changes tonight but more nimble traders may want to adjust their entry plans.

Earlier Comments:
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)

- or -

BUY the 2015 Jan $34 call (FCX1517a34)

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


Hasbro Inc. - HAS - close: 46.72

Comments:
10/13/13: I am removing HAS as a watch list candidate. The stock continued to sink last week. Shares did find support near $46 and its rising 150-dma but I would not launch positions here.

Trade did not open.

10/13/13 removed from the watch list.
trade did not open.

Originally listed on the Watch List: 09/22/13


Walgreen Co. - WAG - close: 55.96

Comments:
10/13/13: WAG endured the market's volatility very well. Profit taking was minimal. Shares mostly drifted sideways in spite of the market's big moves. I am suggesting we stick to our buy-the-dip strategy for now. Let's give it another week and then re-evaluate.

Earlier Comments:
Our target to exit the 2014 calls is $59.50. Target to be determined for the 2015 calls.

Buy-the-Dip trigger: $52.25, use a stop at $48.40

BUY the 2014 Jan $55 call (WAG1418a55)

- or -

BUY the 2015 Jan $60 call (WAG1517a60)

09/22/13 adjust entry strategy: move the trigger to $52.25
adjust the stop loss to $48.40
(previous trigger and stop was $51.50 & 47.40)

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