New Watch List Entries

COF - Capital One Financial

WDC - Western Digital Corp.


Active Watch List Candidates

ATI - Allegheny Tech.

CL - Colgate-Palmolive

DLTR - Dollar Tree Inc.

HP - Helmerich & Payne

NOC - Northrop Grumman

SBUX - Starbucks

WAG - Walgreen Co.


Dropped Watch List Entries

WYN hit our trigger on Friday and has been moved to the new play section.

DKS, FCX, and QCOM were all triggered last week and added to the active play list.
CBI has been removed from the watch list.



New Watch List Candidates:


Capital One Financial - COF - close: 70.37

Company Info

Financial stocks have been showing strength and the sector is breaking out to new multi-year highs. COF has been lagging the group with a pullback from its October peak but traders have been buying the dips near its rising 50-dma. Now after the recent consolidation shares could be presenting a new entry point for bullish positions.

I am suggesting we wait for COF to close above $71.00 and buy calls the next morning with a stop loss at $66.95. Our long-term target is $84.00.

Breakout trigger: Wait for COF to close above $71.00
buy calls the next day with a stop loss at $66.95

BUY the 2015 Jan $75 call (COF1517a75) current ask $5.40

Chart of COF:

Originally listed on the Watch List: 11/17/13


Western Digital Corp. - WDC - close: 75.55

Company Info

WDC is in the technology sector. The company makes data storage devices (like hard drives and solid state drives). The company's latest earnings report was only in line with expectations but shares didn't see much selling on the news. The stock spent a few days consolidating sideways and then resumed its up trend. This past week saw WDC surge to a new all-time high. Traders were already buying the dip near prior resistance on Friday around the $74.00 area.

More aggressive traders may want to just buy calls now. I am suggesting we wait for WDC To close above $76.25 and launch positions the next morning with a stop loss at $69.45. If triggered our long-term target is $94.00. FYI: The Point & Figure chart is bullish with a $91 target.

NOTE: I am putting a condition on this entry point. We want to wait for a close above $76.25 but we do not want to launch positions if WDC closes above $77.50.

Breakout trigger: Wait for a close above $76.25
buy calls the next morning with a stop loss at $69.45

BUY the 2015 Jan $90 call (WDC1517a90) current ask $5.55

Chart of WDC:

Originally listed on the Watch List: 11/17/13


Active Watch List Candidates:



Allegheny Technologies - ATI - close: 33.75

Comments:
11/17/13: ATI continues its sideways consolidation below resistance near the $34.00 level. I don't see any changes from my earlier comments.

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: 79.03

Comments:
11/17/13: CBI continues to race higher without us and I am reluctant to chase it. It is possible that CBI might see some resistance at the $80 level but there is no guarantee.

We are going to remove CBI from the watch list. I remain very bullish on the stock but after a $20 rally from its early September lows we want to see some sort of pullback first before initiating positions.

Trade did not open.

11/17/13 removed from the watch list
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


Colgate-Palmolive - CL - close: 65.78

Comments:
11/17/13: Traders bought the dip in CL near $64 and the stock has bounced back toward its recent highs and resistance near $66.00. More aggressive traders may want to consider buying a breakout above $66.00. At the moment, I don't want to chase it. We will leave our strategy unchanged and re-evaluate next week.

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)

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


Dollar Tree, Inc. - DLTR - close: 59.91

Comments:
11/17/13: DLTR is slowly drifting higher and shares look poised to breakout past resistance at $60.00. Yet I would be reluctant to buy a breakout at least not until we see how the market reacts to DLTR's earnings report. The company is due to report earnings on November 21st. Shares could see some post-earnings profit taking that hopefully hits our buy-the-dip trigger.

If DLTR does not see a post-earnings sell-off then we'll re-evaluate next week.

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


Helmerich & Payne, Inc. - HP - close: 79.27

Comments:
11/17/13: Trading in HP has been choppy the last couple of weeks. Strength in the energy stocks has lifted HP to a new high. The stock looks poised to breakout past the $80 level.

Tonight we are adjusting our entry point strategy and listing a more aggressive entry idea. Wait for HP to close above $80.25 and then buy calls the next day with a stop loss at $74.75. If triggered our long-term target is $95.00.

I am updating the strike price to the 2015 $90 call.

Wait for a close above $80.25, stop loss @ 74.75

BUY the 2015 Jan $90 call (HP1517a90) current ask $5.10

11/17/13 strategy change: Wait for HP to close above $80.25 and then buy calls the next day with a stop loss at $74.75. Our new long-term target is $95.00. New option strike at 2015 $90 call

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


Northrop Grumman - NOC - close: 109.53

Comments:
11/17/13: The rally in NOC has stalled with shares struggling near resistance in the $110 area. We are not giving up on a buy-the-dip entry point but I will raise the entry trigger to $103.50.

We want to wait for a correction and buy calls on a dip at $103.50. 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: $103.50, stop @ 97.75

BUY the 2015 Jan $110 call (NOC1517a110)

11/17/13 new buy-the-dip trigger at $103.50. old one was $102.25.

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


Starbucks - SBUX - close: 81.19

Comments:
11/17/13: The rally in SBUX has also stalled in spite of new highs in the major averages. SBUX is virtually unchanged for the week. I am adjusting our buy-the-dip trigger to $78.25.

Our long-term target is $98.00.

Buy-the-Dip trigger: $78.25, stop loss @ 74.75

BUY the 2015 Jan $85 call (SBUX1517a85)

11/17/13 adjust the trigger to $78.25
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: 60.28

Comments:
11/17/13: WAG has spent almost three weeks in the $59-61 zone. Currently we're waiting for a pullback but more aggressive traders may want to consider buying calls on a breakout above the $61.00 level.

Please note our new buy-the-dip trigger at $56.00.

Buy-the-Dip trigger: $56.00, use a stop at $49.75

BUY the 2015 Jan $65 call (WAG1517a65)

11/17/13 new trigger at $56.00, up from $55.00
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