New Watch List Entries

ANV - Allied Nevada Gold

FSLR - First Solar, Inc

TOL - Toll Brothers


Active Watch List Candidates

BSX - Boston Scientific

KBH - KB Home

RYL - Ryland Group


Dropped Watch List Entries

A has graduated to our play list.



New Watch List Candidates:


Allied Nevada Gold - ANV - close: 5.75

Company Info

After a terrible 2013 performance gold has reversed higher. This past week has seen gold breakout past some significant resistance. This strength in gold has allowed the gold miners to outperform. ANV is one of those miners with big gains last week. We do not want to chase it here.

I am hoping that shares provide a pullback after Friday's rally. Use a trigger at $5.25 with a stop loss at $4.45. This is an aggressive play . Gold and the miners can be volatile and ANV is due to report earnings in the next couple of weeks. I am suggesting small positions to limit our risk.

I am also suggesting investors buy the stock as an alternative to buying the options.

Buy-the-Dip trigger: $5.25, stop loss $4.45

BUY the 2015 Jan $7.50 call (ANV1517a7.5) current ask $0.90

- or -

BUY the ANV the stock @ $5.25

Chart of ANV:

WEEKLY Chart of ANV:

Originally listed on the Watch List: 02/16/14


First Solar, Inc. - FSLR - close: 53.17

Company Info

FSLR is in the technology sector. The company makes solar energy components and systems. Shares of FLSR have been correcting lower since their November 2013 peak. Now after an $18 correction lower shares have finally found support and started to bounce. A breakout past FSLR's 50-dma could signal the next leg higher.

I am suggesting we wait for FSLR to close above $54.00 and then buy calls the next day with a stop loss at $47.40. FSLR can be a volatile stock so I consider this an aggressive, higher-risk trade. Our long-term target is $74.00.

FYI: Earnings are coming up on February 25th. More conservative investors will want to seriously consider waiting until after FSLR reports earnings and we see the market reaction before initiating positions.

*Use small positions to limit risk*

Breakout trigger: Wait for a close above $54.00
then buy calls the next day with a stop at $47.40

BUY the 2015 Jan $60 call (FSLR1517a60) current ask $8.50

Chart of FSLR:

WEEKLY Chart of FSLR:

Originally listed on the Watch List: 02/16/14


Toll Brothers - TOL - close: 37.79

Company Info

TOL is a homebuilder. Stocks in this group have been holding up pretty well in spite of worries that the unusually cold winter weather is killing home sales. The expectation is that pent up demand will produce a rebound surge when weather improves.

Shares of TOL have been consolidating sideways in the $30-38 zone for over a year. A breakout past resistance near $38.00 could be huge and signal the next big move higher. I am suggesting we wait for TOL to close above $38.50 and then buy calls the next day. More conservative investors may want to wait for TOL to close above $40.00 and then buy calls. Readers should also keep in mind that TOL is scheduled to report earnings on Feb. 25th and you may want to wait until after we see how the market reacts to TOL's earnings results before initiating positions.

We already have KBH and RYL on our watch list as potential candidates. I would not trade them all. Pick a homebuilder you like and focus on one.

Breakout trigger: Wait for TOL to close above $38.50 and then buy calls the next morning with a stop loss at $34.30.

BUY the 2015 Jan $40 call (TOL1517a40) current ask $3.90

- or -

BUY the 2016 Jan $45 call (TOL1615a45) current ask $4.60

Chart of TOL:

Originally listed on the Watch List: 02/16/14


Active Watch List Candidates:



Boston Scientific - BSX - close: 13.20

Comments:
02/16/14: BSX could see some movement next week. The stock looks like it's poised to breakout from its recent consolidation/correction phase over the last three weeks. I don't see any changes from last week's new watch list candidate description.

Earlier Comments:
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 $0.98

- or -

BUY the 2016 Jan $15 call (BSX1615a15) current ask $1.99

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


KB Home - KBH - close: 19.03

Comments:
02/16/14: Extremely cold weather will undoubtedly impact home sales and yet investors don't seem too worried about it. The expectation is that demand and sales will return once the weather warms up. Shares of KBH are holding up relatively well. Traders bought the dip near its early February lows and now KBH is rebounding. More aggressive investors might want to launch positions now.

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


Ryland Group - RYL - close: 43.28

Comments:
02/16/14: RYL saw some profit taking early last week but shares have started to bounce. I don't see any changes from last week's new watch list candidate description.

Earlier Comments:
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)

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