New Watch List Entries

BBT - BB&T Corp.

MGM - MGM Resorts

MTW - Manitowoc Co.


Active Watch List Candidates

ATI - Allegheny Tech.

C - Citigroup, Inc.

HD - Home Depot, Inc.

MSI - Motorola Solutions

WFC - Wells Fargo & Co


Dropped Watch List Entries

DE and WDC both graduated to our active play list.



New Watch List Candidates:


BB&T Corp. - BBT - close: 35.34

Company Info

BBT is in the financial sector. The company is a regional bank headquartered in North Carolina. The stock has been showing relative strength. The financial sector is down two weeks in a row. Shares of BBT are up over that time period. The stock was recently upgraded with a $43 target. Its point & figure chart is bullish and forecasting at $57 target.

This past week saw BBY breakout past resistance near $35.00. More aggressive investors might want to buy calls now. I am suggesting we wait for BBT to close above $35.75, which could happen soon, and buy calls the next day with a stop loss at $32.95. Our long-term target is $42.50.

Keep in mind that if the Federal Reserve announces a taper to their QE program on Wednesday it could be a game changer for the market. Investors may not want to open any new positions ahead of the Fed statement.

FYI: BBT is scheduled to report earnings on January 16th.

Breakout trigger: Wait for a close above $35.75
buy calls the next day with a stop loss at $32.95

BUY the 2015 Jan $40 call (BBT1517a40) current ask $0.82

Chart of BBT:

Originally listed on the Watch List: 12/15/13


MGM Resorts - MGM - close: 21.20

Company Info

MGM is considered part of the services sector. The company runs several casinos including properties here in the U.S., in China, and in Macau. Plus they've also expected to the newly opened online gambling in New Jersey. The stock has been surging in recent weeks with a three-week climb that has completely ignored the market's recent weakness. This past week saw MGM breakout to new multi-year highs.

I am suggesting that we wait for MGM to close above $21.50 and buy calls the next day with a stop loss at $19.35. Our long-term target is the $26-28 zone.

Breakout trigger: Wait for a close above $21.50
buy calls the next day with a stop loss at $19.35

BUY the 2015 Jan $25 call (MGM1517a25) current ask $1.78

Chart of MGM:

Originally listed on the Watch List: 12/15/13


The Manitowoc Co. - MTW - close: 21.50

Company Info

MTW is in the industrial goods sector. The company makes cranes and has another unit that makes foodservice equipment. Shares have been showing relative strength. The stock is just finished its third weekly gain while ignoring the broader market's weakness. MTW is quickly approaching major resistance near the $22.00 level. A breakout there could herald the next major leg higher.

I am suggesting we wait for MTW to close above $22.10 and then buy calls the next morning with a stop loss at $19.90. If triggered our long-term target is the $28-30 zone. Currently the point & figure chart is bullish and forecasting at $26.50 target.

Breakout trigger: Wait for a close above $22.10
buy calls the next day with a stop loss at $19.90

BUY the 2015 Jan $25 call (MTW1517a25) current ask $2.55

Chart of MTW:

Originally listed on the Watch List: 12/15/13


Active Watch List Candidates:



Allegheny Technologies - ATI - close: 32.77

Comments:
12/15/13: ATI ended unchanged on the week thanks to a two-day bounce from short-term support near $32.00. Reversing its losses is a bit of a show of relative strength. We'll hold on to ATI for another week and see how shares progress.

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


Citigroup Inc. - C - close: 50.97

Comments:
12/15/13: The financial sector is down two weeks in a row and Citigroup is no exception. I am expecting a bounce from the $50 area but we will still wait for a breakout to new highs before considering new positions. I don't see any changes from my prior comments.

We want to wait for C to close above $53.60 and then buy calls the next morning. I am adjusting our stop loss to $47.90. Our long-term target is the $70.00 area.

FYI: C is scheduled to report earnings on January 16th.

Breakout trigger: Wait for C to close above $53.60
buy calls the next morning with a stop loss at $47.90

BUY the 2015 Jan $60 call (C1517a60)

- or -

BUY the 2016 Jan $60 call (C1615a60)

12/08/13 if triggered start with a stop loss at $47.90
12/01/13 adjust the entry trigger: wait for a close above $53.60 instead of a close above $53.50

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


Home Depot, Inc. - HD - close: 79.01

Comments:
12/15/13: This past week saw HD reaffirm its prior earnings guidance for 2014. The stock didn't move much on this news. The sideways consolidation in shares of HD appears to be narrowing. That means we should see this stock breakout one way or the other pretty soon. I do not see any changes from last week's new watch list entry for HD.

I am suggesting we wait for HD to close above $81.50 and buy calls the next morning with an initial stop loss at $76.75. Our long-term target is $99.00. FYI: The point & figure chart is bullish with a $97 target.

Breakout trigger: Wait for HD to close above $81.50
then buy calls the next morning.

BUY the 2015 Jan $90 call (HD1517a90)

- or -

BUY the 2016 Jan $90 call (HD1615a90)

Originally listed on the Watch List: 12/01/13


Motorola Solutions - MSI - close: 65.05

Comments:
12/15/13: The pullback in MSI has been relatively minor. I don't see any changes from my earlier comments.

I am suggesting a trigger to buy calls at $66.75. If triggered our long-term target is the $80-90 zone but we will adjust this as needed. The point & figure chart is bullish with a long-term target at $91.00.

Breakout trigger: $66.75, start with a stop loss at $61.90.

BUY the 2015 Jan $70 call (MSI1517a70)

- or -

BUY the 2016 Jan $75 call (MSI1615a75)

Originally listed on the Watch List: 12/08/13


Wells Fargo & Co. - WFC - close: 43.73

Comments:
12/15/13: WDC only lost 38 cents for the week. That's less than one percent. Overall I do not see any changes from my prior comments.

Earlier Comments:
The $44.50-45.00 zone appears to be major resistance. A reversal here would look like a potential bearish double top pattern. Yet a breakout could signal the next major leg higher.

I am suggesting we wait for WFC to close above $45.25 and then buy calls the next day with a stop loss at $41.90. Our long-term target is $54.50.

Breakout trigger: Wait for WFC to close above $45.25
then buy calls the next day with a stop at $41.90

BUY the 2015 Jan $50 call (WFC1517a50)

- or -

BUY the 2016 Jan $50 call (WFC1615a50)

Originally listed on the Watch List: 12/08/13