New Watch List Entries

CBI - Chicago Bridge & Iron

MA - MasterCard

PFE - Pfizer Inc.


Active Watch List Candidates

BSX - Boston Scientific

KMB - Kimberly-Clark Corp.


Dropped Watch List Entries

ALK, ANV, KBH, RYL, and TOL have all graduated to our play list.



New Watch List Candidates:


Chicago Bridge & Iron - CBI - close: 84.19

Company Info

CBI is part of the industrial goods sector. They are a huge contract construction firm with a big focus on energy infrastructure projects. The stock was a big performer in 2013. The company has been firing on all cylinders yet that didn't stop shares from seeing some profit taking and a correction lower in the second half of January (following the market lower). The stock market's bounce from the February lows has carried CBI back toward its highs. Shares managed to breakout to new highs following a much better than expected earnings report.

Wall Street was expecting a profit of $1.17 a share on revenues of $3.08 billion. CBI reported revenues of $3.0 billion but net profits soared to $1.91 a share. Their backlog surged +155% to $27.8 billion. I suspect we could see CBI reach $100 or more by yearend. The Point & Figure chart is forecasting at $111.00 target.

Tonight I am suggesting investors wait for CBI to close above $85.00 and then buy calls the next morning with a stop loss at $79.45. Our target will be $99.50.

Breakout trigger: Wait for CBI to close above $85.00
then buy calls the next morning with a stop at $79.45.

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

- or -

BUY the 2016 Jan $100 call (CBI1615a100) current ask $8.10

Chart of CBI:

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


Mastercard Inc. - MA - close: 77.72

Company Info

MA is in the financial sector. The company provides transaction processing and payment-related services. They're best known for their MasterCard branded credit cards but they also provide debit cards, prepaid cards and more. MA processes about 33% of the world's credit card transactions and about 19% of the global debit card transactions. MA growing its "in-app payment" service that allows users to make purchases with a mobile app and MA just recently announced plans to buy C-SAM, a mobile-wallet type of service.

The U.S., Europe, and most of the Western countries see a significant amount of electronic transactions but a lot of the emerging markets still do a significant amount of cash transactions. MA sees this trend changing as the rest of the globe catches up to credit and debit card transactions.

The stock recently held a 10-for-1 stock split on January 21st, 2014. During the market's January sell-off MA corrected from $85 to $72.50. The bounce has stalled beneath resistance in the $78-80 zone but the point & figure chart is still bullish with a $89.00 target.

I am suggesting investors wait for MA to close above $80.00 and buy calls the next morning with a stop loss at $74.75. Our long-term target is $99.00.

Breakout trigger: Wait for MA to close above $80.00
then buy calls the next morning with a stop at $74.75.

BUY the 2015 Jan $85 call (MA1517a85) current ask $4.45

- or -

BUY the 2016 Jan $90 call (MA1615a90) current ask $7.30

Chart of MA:

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


Pfizer Inc. - PFE - close: 32.11

Company Info

PFE is in the healthcare sector. The company, founded back in 1849, has grown into a titanic drug maker. Wall Street expects 2014 to see significantly more volatility than 2013, which was an unusually low-volatility year. An increase in market volatility could drive investor money into more defensive and high-dividend names thanks to their perceived safety. PFE looks tempting with a long-term bullish trend and a 3.2% yield.

Currently PFE is on the verge of a breakout past resistance near $32.50. Such a move would mark new multi-year highs for the stock. I am suggesting investors wait for PFE to close above $32.75 and then buy calls the next morning with a stop loss at $29.75. Our long-term target is the $38-40 zone. I prefer the 2016 calls but I'm listing both the 2015s and 2016s.

Breakout trigger: Wait for PFE to close above $32.75
then buy calls the next morning with a stop at $29.75.

BUY the 2015 Jan $35 call (PFE1517a35) current ask $0.95

- or -

BUY the 2016 Jan $35 call (PFE1615a35) current ask $1.75

Chart of PFE:

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


Active Watch List Candidates:



Boston Scientific - BSX - close: 13.10

Comments:
03/02/14: BSX flirted with a push past resistance near $13.50 but didn't quite make it. The intraday high on February 26th was $13.58. We will adjust our trigger from a close above $13.50 to a close above $13.60.

Earlier Comments:
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 $13.60
then buy calls the next morning, stop loss @ 11.90

BUY the 2015 Jan $15 call (BSX1517a15)

- or -

BUY the 2016 Jan $15 call (BSX1615a15)

03/02/14 adjust entry trigger. Wait for close above $13.60 (instead of 13.50)

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


Kimberly Clark Corp. - KMB - close: 110.35

Comments:
03/02/14: Traders bought the dip in KMB near $108 last week. The rebound has left shares poised for a breakout higher. I don't see any changes from my prior comments.

Earlier Comments:
The stock's recent 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.

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: Wait for a close above $112.00
buy calls the next day. stop loss @ 107.00.

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

- or -

BUY the 2016 Jan $120 call (KMB1615a120) current ask $5.40

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