New Watch List Entries

CL - Colgate-Palmolive

WYN - Wyndham Worldwide


Active Watch List Candidates

ATI - Allegheny Tech.

CBI - Chicago Bridge & Iron

DKS - Dick's Sporting Goods

DLTR - Dollar Tree Inc.

FCX - Freeport McMoRan

HP - Helmerich & Payne

NOC - Northrop Grumman

QCOM - QUALCOMM Inc.

SBUX - Starbucks

WAG - Walgreen Co.


Dropped Watch List Entries

AVGO has been moved to our new play section.



New Watch List Candidates:


Colgate-Palmolive - CL - close: 64.83

Company Info

CL is in the consumer goods sector. The stock is seen as a more defensive trade since people continue to buy personal products with little regard for the health of the economy. The company delivered a lackluster earnings report in late October but that didn't stop the stock from surging to new all-time highs.

CL's relative strength is impressive but this past week's decline ended a four-week winning streak. This could be the beginning of a correction and we want to be ready to buy a pullback. I am suggesting we buy calls on a dip at $62.25. If triggered our long-term target is $75.00

Buy-the-Dip trigger: $62.25, stop loss @ 59.40

BUY the 2015 Jan $70 (CL1517a70) current ask $2.22

Chart of CL:

Originally listed on the Watch List: 11/10/13


Wyndham Worldwide - WYN - close: 66.20

Company Info

WYN is in the services sector. They operate in three segments: lodging, vacation exchange and rentals, and vacation ownership. The company's most recent earnings report was bullish. WYN beat analysts expectations on both the top and bottom line. Management then raised their guidance. The stock reacted with a surge past resistance to close at new all-time highs. The same move higher produced a triple-top breakout buy signal on its point & figure chart with an $84 target.

WYN has spent the last two weeks stuck under resistance at $67.50. I am suggesting we wait for shares to close above $68.00 and buy calls the next day. If triggered we will start with a stop loss at $63.75. Our long-term target is $85.00.

Breakout trigger: Wait for a close above $68.00,
then buy calls the next day. Stop loss @ 63.75.

BUY the 2015 Jan $75 call (WYN1517a75) current ask $3.50

Chart of WYN:

Originally listed on the Watch List: 11/10/13


Active Watch List Candidates:



Allegheny Technologies - ATI - close: 33.82

Comments:
11/10/13: ATI has spent the last two weeks consolidating sideways in the $33-34 zone. Shares look poised to breakout higher. We want to be ready if that happens.

I am suggesting we buy calls if ATI can close above $34.50. Wait for it to close above this level and buy calls the next day with a stop loss at $30.40. Our long-term target is $44.00.

Breakout trigger: Wait for a close above $34.50
then buy calls the next morning with a stop loss @ 30.40

BUY the 2015 Jan $40 call (ATI1517a40)

Originally listed on the Watch List: 11/03/13


Chicago Bridge & Iron - CBI - close: 76.26

Comments:
11/10/13: Shares of CBI have been more volatile lately. That could indicate the stock is near a short-term top. However, for the moment the trend is still higher and we do not want to chase it.

We're suggesting a trigger to buy calls at $68.50. If triggered use a stop loss at $63.75. Our long-term target for the 2015 calls is $84. Our long-term target for the 2016 calls $94.

Buy-the-Dip trigger: $68.50

BUY the 2015 Jan $75 call (CBI1517a75)

- or -

BUY the 2016 Jan $80 call (CBI1615a80)

11/03/13 adjust the stop loss to $63.75
10/20/13 adjust the buy-the-dip trigger to $68.50 from $66.00.
adjust the stop loss to $62.40

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


Dick's Sporting Goods - DKS - close: 54.11

Comments:
11/10/13: DKS is flirting with a bullish breakout over major resistance near $54.00. The stock hit a new all-time high on an intraday basis at $54.86 on Thursday morning. I do not see any changes from my prior comments.

NOTE: More conservative investors may want to wait until after we see how the market reacts to DKS' earnings results before initiating positions. There is no date set but DKS will likely announce in mid November.

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 2015 Jan $60 call (DKS1517a60)

10/27/13 removed the 2014 call.

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


Dollar Tree, Inc. - DLTR - close: 58.66

Comments:
11/10/13: The action in DLTR last week looks bearish with a failed rally at resistance near $60.00. Yet there hasn't been any follow through lower. We're hoping for a correction toward support near $56.00. More conservative investors could wait and hope for a dip closer to $55.00 before initiating positions.

Earlier Comments:
Our long-term target is the $65 area. FYI: The point & figure chart is bullish with a $78 target.

Buy-the-Dip trigger: $56.25, stop loss @ 52.40

BUY the 2015 Jan $65 call (DLTR1517a65)

10/27/13 removed the 2014 call
10/20/13 adjust the trigger to $56.25 and the stop to $52.40

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


Freeport-McMoRan - FCX - close: 36.58

Comments:
11/10/13: FCX is down two weeks in a row. If this correction continues we could see the stock hit our buy-the-dip entry point at $35.25 soon. More conservative traders may want to wait for a dip near the 50-dma instead as an alternative entry point.

We want to buy calls on a dip at $35.25. If triggered our long-term target is $42.50.

Buy-the-Dip trigger: $35.25, small positions!
start with a stop loss at $32.25.

BUY the 2015 Jan $39 call (FCX1517a39)

10/27/13 strategy update: removed the 2014 calls
adjust the buy-the-dip trigger to $35.25 and the stop to $32.25.
adjust the option strike to the 2015 Jan $39 call

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


Helmerich & Payne, Inc. - HP - close: 77.43

Comments:
11/10/13: HP managed another gain for the week but shares look vulnerable to more profit taking. Thursday's drop erased almost two weeks worth of gains. The stock did see a big bounce on Friday but it proved to be an inside day.

We are still expecting a pullback. I am suggesting we wait and buy calls on a dip at the $72.25 mark. if triggered we'll start with a stop loss at $67.75. Our long-term target is $85.00.

NOTE: HP is scheduled to report earnings on November 14th.

Buy-the-Dip trigger: $72.25, stop loss 67.75

BUY the 2015 Jan $80 call (HP1517a80)

Originally listed on the Watch List: 10/27/13


Northrop Grumman - NOC - close: 110.73

Comments:
11/10/13: NOC continues to show relative strength and closed at a new all-time high on Friday. We do not want to chase it. Let's give NOC another week and then we'll re-evaluate our entry strategy.

We want to wait for a correction and buy calls on a dip at $102.25. If triggered I am suggesting a stop loss at $97.75. Our long-term target is $118.00. FYI: The Point & Figure chart is bullish with a $160 target.

Buy-the-Dip trigger: $102.25, stop @ 97.75

BUY the 2015 Jan $110 call (NOC1517a110)

Originally listed on the Watch List: 10/27/13


QUALCOMM Inc. - QCOM - close: 69.90

Comments:
11/10/13: A disappointing earnings report and a down day for the market on Thursday double-teamed QCOM for a big loss on Thursday. I am suggesting we give QCOM a week or two to recover. At the moment our plan is unchanged.

If QCOM can breakout past resistance at $70.00 it will look like a buy. The intraday high on September 10th was $70.37. I am suggesting we wait for QCOM to close above $70.50 and buy calls the next day. If triggered our long-term target is $85.00.

Breakout trigger: Wait for QCOM to close above $70.50 (see details)
if triggered start with a stop loss at $66.75

BUY the 2015 Jan $75 call (QCOM1517a75)

Originally listed on the Watch List: 11/03/13


Starbucks - SBUX - close: 81.20

Comments:
11/10/13: Believe it or not but SBUX is up ten weeks in a row. I am adjusting our buy-the-dip entry point to $78.00 and moving the stop loss up to $74.75.

Our long-term target is $98.00.

Buy-the-Dip trigger: $78.00, stop loss @ 74.75

BUY the 2015 Jan $85 call (SBUX1517a85)

11/10/13 adjust the buy-the-dip entry to $78.00 and stop to $74.75
11/03/13 adjust buy-the-dip entry from $76 to $77.00

Originally listed on the Watch List: 10/27/13


Walgreen Co. - WAG - close: 59.70

Comments:
11/10/13: WAG snapped a five-week winning streak. We are hoping the profit taking continues. Currently our plan is to wait for a correction and buy calls at $55.00.

Buy-the-Dip trigger: $55.00, use a stop at $49.75

BUY the 2015 Jan $65 call (WAG1517a65)

10/27/13 removed the 2014 calls
10/20/13 adjust the buy-the-dip trigger to $55.00 and move the stop loss to $49.75. Plus we will adjust our option strikes higher.
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