Editor's Note:

Radar Screen:
Here is a list of stocks on my radar screen. These have potential to be LEAPS trades down the road if the right entry point presents itself:

PVA, ANV, CRM, UPL, SCCO, STZ, ZNGA, ADBE, ROVI, LMT, BA, GD, NOC, RTN, ATK, SWI, MGM, STX, WDC, DNKN, BKW, ALK, DE, CAT, KMB, CL, ESRX, BHI, URI, TIF, DECK, PSX, SYK, FB, GE, MA,



New Watch List Entries

BSX - Boston Scientific

RYL - Ryland Group


Active Watch List Candidates

A - Agilent Tech

KBH - KB Home


Dropped Watch List Entries

GILD has graduated to our active play list.

MU has been moved to our new play section.



New Watch List Candidates:


Boston Scientific - BSX - close: 13.10

Company Info

BSX is in the healthcare sector. The company makes medical devices. The stock has fallen a long way from its 2004 highs near $45.00 a share. Momentum reversed last year with a rally from $5.00 in late 2012 to $12.00 in late 2013. Momentum has resumed this year with BSX climbing to new multi-year highs.

BSX reported earnings this past week that beat estimates by eight cents and managed guided higher. I suspect the up trend will resume if the market cooperates. More aggressive investors could buy calls right here. I am suggesting we wait for BSX to close above $13.50 and then buy calls the next morning. We'll start with a stop loss at $11.90. More conservative traders may want to wait for BSX to close above $14.00 before considering new positions.

If triggered our long-term target is the $17.00-18.00 area. The point & figure chart is much more bullish and forecasting at $32.50 target.

Breakout trigger: Wait for a close above $13.50
then buy calls the next morning, stop loss @ 11.90

BUY the 2015 Jan $15 call (BSX1517a15) current ask $0.97

- or -

BUY the 2016 Jan $15 call (BSX1615a15) current ask $1.80

Chart of BSX:

Originally listed on the Watch List: 02/09/14


Ryland Group - RYL - close: 45.06

Company Info

RYL is another homebuilder, like KBH, which is already on our watch list. However, RYL looks stronger than RYL and likely to breakout past key resistance sooner than KBH will.

2013 was a pretty good year for the residential real estate market. It wasn't so great for the homebuilders. Many of the homebuilder stocks spent a good portion of the year consolidating sideways and working off the excesses of 2012. That consolidation looks like it could be over soon for shares of RYL.

Shares of RYL weathered the market's recent storm very well. The latest new home sales figures have not been that exciting but this data hasn't stopped the rally in homebuilder stocks either. Currently shares of RYL are hovering at resistance near $45.00. The recent high was $45.44. I am suggesting we wait for RYL to close above $45.75 and then buy calls the next day. More aggressive investors may want to just jump in early right now. If we are triggered above $45.75 I am suggesting a stop loss at $41.25.

The $50.00 level was resistance back in early 2013 and will likely be resistance again. However, we are aiming for the $55-60 range. The point & figure chart for RYL is forecasting a long-term target of $64.00.

Breakout trigger: Wait for a close above $45.75
then buy calls the next day. Stop loss at $41.25.

BUY the 2015 Jan $50 call (RYL1517a50) current ask $4.90

Chart of RYL:

Originally listed on the Watch List: 02/09/14


Active Watch List Candidates:



Agilent Technologies - A - close: 59.42

Comments:
02/09/14: Shares of A have delivered a pretty strong bounce after testing support near $56.00. That's too bad when shares came so close to hitting our buy-the-dip trigger at $55.50.

A is due to report earnings on Feb. 13th. That's Thursday. The stock could always see some post-earnings volatility. I am actually moving our buy-the-dip trigger lower to $55.00. If shares do not hit our entry point on Friday then we'll re-evaluate our entry strategy next weekend.

Earlier Comments:
If triggered, start with a stop loss at $52.40. Our long-term target is $74.00.

FYI: A does plan on spinning off its electronic measurement company, Keysight Technologies, toward the end of 2014.

Buy-the-Dip trigger: $55.00

BUY the 2015 Jan $60 call (A1517a60)

- or -

BUY the 2016 Jan $65 call (A1615a65)

02/09/14 adjust the entry trigger to $55.00 (from $55.50)

Originally listed on the Watch List: 01/26/14


KB Home - KBH - close: 18.92

Comments:
02/09/14: KBH and the rest of the homebuilders held up reasonably well during the market's recent sell-off. Shares bounced at $18.15 near its 30-dma. More aggressive investors might want to consider buying calls now on this rebound. We're suggesting traders wait for a close above potential round-number resistance at $20.00. If triggered our long-term target is $25.00.

Breakout trigger: Wait for a close above $20.00,
then buy calls the next day with a stop at $18.45.

BUY the 2015 Jan $20 call (KBH1517a20)

Originally listed on the Watch List: 02/03/14