New Watch List Entries

C - Citigroup, Inc.

COP - ConocoPhillips

HFC - HollyFrontier


Active Watch List Candidates

ATI - Allegheny Tech.

COF - Capital One Financial

HP - Helmerich & Payne

SBUX - Starbucks

WAG - Walgreen Co.

WDC - Western Digital Corp.


Dropped Watch List Entries

DLTR graduated to the play list.

CL and NOC have been removed tonight.



New Watch List Candidates:


Citigroup Inc. - C - close: 52.41

Company Info

Citigroup is in the financial sector. They are a massive, global financial giant. After years of being dead money the investor outlook for C has improved significantly. Shares have spent the last few months consolidating sideways below resistance near $53.00. I am suggesting we wait for C to close above $53.50 and then buy calls the next day with a stop loss at $47.25. Our long-term target is the $70.00 area.

Breakout trigger: Wait for C to close above $53.50
buy calls the next morning with a stop loss at $47.25

BUY the 2015 Jan $60 call (C1517a60) current ask $2.99

Chart of C:

Originally listed on the Watch List: 11/24/13


ConocoPhillips - COP - close: 74.02

Company Info

COP is an energy giant. They produce, transport, and sell oil, natural gas, and refined products. The oil stocks have managed to completely ignore the weakness in crude oil prices. The group actually looks poised to breakout higher. COP is one of them. Shares of COP have long-term resistance near the $74.00 level dating back to 2008. The stock has just spent the better part of four weeks consolidating below this resistance area.

I am suggesting we wait for COP to close above $75.00 and then buy calls the next morning with a stop loss at $69.75. More conservative investors might want to use a stop closer to $72 instead. If triggered our long-term target is $95.00.

Breakout trigger: Wait for COP to close above $75.00
then buy calls the next day with a stop at $69.75

BUY the 2015 Jan $80 call (COP1517a80) current ask $2.51

Chart of COP:

Originally listed on the Watch List: 11/24/13


HollyFrontier Corp. - HFC - close: 46.39

Company Info

HFC is another energy-related stock. The company is a petroleum refiner. They produce gasoline, diesel fuel, jet fuel, and more. The stock plunged on November 6th following its earnings report. HFC missed by 23 cents but revenues were significantly above analyst expectations. The earnings miss fueled by a big drop in gross margins. You'll notice that there was no follow through on the post-earnings sell off. HFC has bounced back. Now shares are trying to breakout past technical resistance at its simple 200-dma near $47.00.

I am suggesting we wait for HFC to close above $47.50 and then buy calls the next day with a stop loss at $43.25. Our long-term target is $59.00. FYI: A move past $48.00 would create a new triple-top breakout buy signal on HFC's point & figure chart.

Breakout trigger: Wait for HFC to close above $47.50
then buy calls the next day with a stop at $43.25

BUY the 2015 Jan $49.50 call (HFC1517a49.5) current ask $4.60

Chart of HFC:

Originally listed on the Watch List: 11/24/13


Active Watch List Candidates:



Allegheny Technologies - ATI - close: 33.93

Comments:
11/24/13: ATI is still consolidating sideways below resistance in the $34.00-34.50 area. 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


Colgate-Palmolive - CL - close: 66.26

Comments:
11/24/13: We were hoping to buy calls on a dip in CL. The stock is not cooperating. Shares have actually broken out past resistance near $66.00, which is bullish. However, we don't want to chase it here. More aggressive traders may want to consider buying calls now. Tonight we are temporarily removing CL from our watch list. We'll look at it again in a couple of weeks.

Trade did not open.

11/24/13 removed from the watch list.

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


Capital One Financial - COF - close: 69.61

Comments:
11/24/13: Hmm... I am starting to wonder about COF. Financial stocks continue to show relative strength but COF is not really participating. The stock is just churning sideways. Let's give COF another week and then we'll decide to either drop it or adjust our strategy.

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)

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


Helmerich & Payne, Inc. - HP - close: 78.97

Comments:
11/24/13: HP spent the week drifting sideways. Shares didn't decline much during the market's three-day pullback. At the same time HP didn't rally much with the market's bounce. We're still waiting for a breakout past $80.00.

Earlier Comments:
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.

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: 112.01

Comments:
11/24/13: NOC continues to drift higher and shares ended the week at a new record high. Yet we don't want to chase it here. The plan was to buy calls on a dip but NOC is not cooperating.

Tonight we are removing NOC from the watch list. I would check it out again on any significant pullback.

Trade did not open.

11/24/13 removed from the watch list
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: 81.35

Comments:
11/24/13: Shares of SBUX continue to drift sideways less than a dollar from its all-time high. Readers may want to consider buying calls on a breakout past $82.00 or the intraday high at $82.50. We're still trying to buy calls on a dip. The simple 50-dma has risen to $78.70. We will raise our buy-the-dip trigger to $79.25. I am also adjusting the option strike to the 2015 January $90 call.

Our long-term target is $98.00.

Buy-the-Dip trigger: $79.25, stop loss @ 74.75

BUY the 2015 Jan $90 call (SBUX1517a90)

11/24/13 adjust the trigger to $79.25
adjust the option strike to the 2015 January $90 call
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: 60.50

Comments:
11/24/13: We've been waiting for WAG to see some profit taking hoping we could buy calls on a dip. So far it's not happening. Shares were downgraded on Tuesday morning and the stock spiked down to the $58.50 area. Traders immediately bought the dip the next day. WAG looks poised to breakout soon. I am adjusting our entry strategy. Instead of trying to buy a dip we will buy a breakout. Wait for WAG to close above $61.00 and then buy calls the next day. We'll move the stop loss to $56.75. Our long-term target is the $75 area.

FYI: WAG is scheduled to report earnings on December 20th.

Wait for WAG to close above $61.00,
then buy calls the next day with a stop at $56.75

BUY the 2015 Jan $65 call (WAG1517a65) current ask $3.75

11/24/13 Strategy Update: new entry point to buy calls when WAG closes above $61.00. New stop loss @ 56.75.
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


Western Digital Corp. - WDC - close: 75.13

Comments:
11/24/13: After hitting new all-time highs shares of WDC suffered a little profit taking. Traders have been consistently buying the dips at its rising 10-dma. More aggressive traders may want to 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 $5.25

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