New Watch List Entries

FL - Foot Locker, Inc.

ITW - Illinois Tool Works

STX - Seagate Tech.


Active Watch List Candidates

C - Citigroup, Inc.

CBI - Chicago Bridge & Iron

SWN - Southwestern Energy


Dropped Watch List Entries

GE, HD, MSI, and WFC have all graduated to our play list.



New Watch List Candidates:


Foot Locker, Inc. - FL - close: 40.98

Company Info

FL is in the consumer goods sector. The company runs a chain of retail stores selling athletic shoes and apparel. I listed FL as one of my favorite trading ideas in last week's new plays section. The stock's rally off its August, September, and October 2013 lows has been significant. The $38 level was major resistance and FL spent more than two weeks digesting that breakout. FL now sits at all-time highs. I suspect that shares will pullback when the market dips. We want to be ready to take advantage of the decline.

I am suggesting a buy-the-dip entry point at $39.25. If triggered we'll use a stop loss at $36.75. If triggered our target is $48.00. More aggressive traders could aim higher since the point & figure chart is forecasting a $60 target.

Buy-the-Dip trigger: $39.25

BUY the 2015 Jan $40 call (FL1517a40) current ask $5.10

Chart of FL:

Originally listed on the Watch List: 12/29/13


Illinois Tool Works Inc. - ITW - close: 83.59

Company Info

ITW is in the industrial goods sector. The industrials have been showing momentum with the group hitting new highs. ITW has been participating and hit new record highs this past week. We like the momentum but we do not want to chase it. When the market eventually dips, and it will, we want to be ready to buy a dip in ITW. Broken resistance near $80.00 should be support.

I am suggesting a buy-the-dip trigger at $80.25. If triggered we'll start with a stop loss at $76.85. Our long-term target is $95.00.

Buy-the-Dip trigger: $80.25

BUY the 2015 Jan $85 call (ITW1517a85) current ask $5.50

Chart of ITW:

Originally listed on the Watch List: 12/29/13


Seagate Technology - STX - close: 55.66

Company Info

STX is in the technology sector. The company makes electronic data storage devices (hard drives, flash drives, etc.). The stock struggled with resistance near $50.00 for weeks but finally broke free this month (December). This past week saw the rally stall because shares hit the top of its long-term, bullish channel (see chart). I am expecting a pullback toward $50.00, which should be support.

Tonight I am suggesting a buy-the-dip trigger at $51.00. If triggered we'll use a stop loss at $46.75. Our long-term target is $65. More aggressive investors could aim higher. The point & figure chart is predicting a $77 target.

Buy-the-Dip trigger: $51.00

BUY the 2015 Jan $55 call (STX1517a55) current ask $7.40

Chart of STX:

Originally listed on the Watch List: 12/29/13


Active Watch List Candidates:



Citigroup Inc. - C - close: 52.26

Comments:
12/29/13: The holiday week was a quiet one for Citigroup. Shares underperformed both the broader market and the financial sector with a sideways move in the $52.00-52.50 zone. We are waiting on a new relative high.

Earlier Comments:
We want to wait for C to close above $53.60 and then buy calls the next morning. 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


Chicago Bridge & Iron - CBI - close: 82.00

Comments:
12/29/13: CBI eked out a small gain for the week. The broader market indices look overbought and due for a dip. When the market declines I am expecting CBI to dip toward support near $80.00. More conservative traders may want to wait and see if shares dip toward the next level of short-term support near $78.00 as an alternative entry point.

Earlier Comments:
CBI's recent breakout past resistance near $80.00 has created a new triple-top breakout buy signal on its point & figure chart. We're suggesting a buy-the-dip trigger to buy calls at $80.25 since broken resistance at $80.00 should be support.

If triggered we'll use a stop loss at $74.75. Our long-term target is $98.50.

Buy-the-Dip trigger: $80.25

BUY the 2015 Jan $90 call (CBI1517a90) current ask $6.50

Originally listed on the Watch List: 12/22/13


Southwestern Energy Co. - SWN - close: 39.73

Comments:
12/29/13: SWN flirted with a bullish breakout past $40.00. Shares failed at the $40.50 level twice last week. I don't see any changes from my prior comments.

Earlier Comments:
SWN has been stuck in the $35-40 trading range for several months. A breakout here near $40.00 would be big news. I am suggesting we wait for SWN to close above $40.50 and then buy calls the next morning with a stop loss at $37.45. If triggered our long-term target is $49.50.

Breakout trigger: Wait for SWN to close over $40.50
then buy calls the next morning with a stop at $37.45

BUY the 2015 Jan $45 call (SWN1517a45)

- or -

BUY the 2016 Jan $45 call (SWN1615a45)

Originally listed on the Watch List: 12/22/13