New Watch List Entries

ALK - Alaska Air Group

KMB - Kimberly-Clark Corp.


Active Watch List Candidates

ANV - Allied Nevada Gold

BSX - Boston Scientific

KBH - KB Home

RYL - Ryland Group

TOL - Toll Brothers


Dropped Watch List Entries

FSLR graduated to our play list.



New Watch List Candidates:


Alaska Air Group - ALK - close: 81.54

Company Info

ALK is in the services sector. The company is a regional airline. Airlines stocks as a group have been showing relative strength. ALK is interesting since shares look bullish but they are not quite so overbought as some if its peers. Right now ALK is hovering below resistance at the $82.00 level. The point & figure chart is already bullish with a $98.00 target.

I am suggesting investors wait for ALK to close above $82.50 and buy calls the next day with a stop loss at $77.40. If triggered our long-term target is $99.00.

Breakout trigger: Wait for a close above $82.50
then buy calls the next day with a stop at $77.40

BUY the 2015 Jan $90 call (ALK1517a90) current ask $6.50

Chart of ALK:

Originally listed on the Watch List: 02/23/14


Kimberly Clark Corp. - KMB - close: 109.85

Company Info

KMB is in the consumer products sector. The company makes a wide range of personal care, paper, and health care related products. With a dividend close to 3% and a relatively stable business KMB is seen as more of a defensive play. Less volatile and stable may be an attractive combination in 2014.

The stock's current rally has lifted shares to key resistance near $110-111. A breakout here could signal the next big leg higher. The point & figure chart is already very bullish forecasting a $145 target.

Friday's high was $111.29. I am suggesting we wait for KMB to close above $112.00 and then buy calls the next day with a stop loss at $107.00. If triggered our long-term target is $128.00.

FYI: KMB is planning to spin off its health care business by the end of Q3 2014.

Breakout trigger: $xx

BUY the 2015 Jan $115 call (KMB1517a115) current ask $3.90

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BUY the 2016 Jan $120 call (KMB1615a120) current ask $5.30

Chart of KMB:

Originally listed on the Watch List: 02/23/14


Active Watch List Candidates:



Allied Nevada Gold - ANV - close: 5.57

Comments:
02/23/14: Gold managed another gain for the week but ANV saw some profit taking.

This company is scheduled to report earnings on Monday, Feb. 24th, after the closing bell. Just in case ANV sees a sharp, post-earnings drop I am adjusting our entry trigger from $5.25 to $5.00. Look for shares to see some volatility on Tuesday morning.

Earlier Comments:
This is an aggressive play . Gold and the miners can be volatile 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: $5.00, stop loss $4.45

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

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BUY the ANV the stock @ $5.00

02/23/14 Adjust the buy-the-dip entry to $5.00 (from $5.25)

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


Boston Scientific - BSX - close: 13.14

Comments:
02/23/14: BSX is still consolidating sideways inside a neutral pattern of higher lows and lower highs. I do not see any changes from my earlier comments.

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)

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BUY the 2016 Jan $15 call (BSX1615a15)

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


KB Home - KBH - close: 19.00

Comments:
02/23/14: The homebuilders have held up very well considering all of the bearish economic data in the last couple of weeks. Housing starts plunged -16%. Existing home sales fell -5%. People keep blaming the weather on these declines but even areas where weather was not an issue are seeing pullbacks. Yet somehow the housing stocks maintain their bullish posture.

Please note that we have three housing stocks on the watch list. I would not try and trade them all. Pick the one you like best.

Earlier Comments:
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: 43.05

Comments:
02/23/14: Please see my comments on housing data in the KBH watch list candidate above.

RYL is still holding up well but doesn't look quiet as bullish as KBH at the moment.

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


Toll Brothers - TOL - close: 38.19

Comments:
02/23/14: Please see my comments on housing data in the KBH watch list candidate above.

TOL has continued to show relative strength and added +2.1% on Friday. The close above the $38.00 level is bullish. Shares could meet our entry point requirements very soon.

Earlier Comments:
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.

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)

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BUY the 2016 Jan $45 call (TOL1615a45)

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