New Watch List Entries

AGU - Agrium

CAT - Caterpillar Inc

WDC - Western Digital Corp.


Active Watch List Candidates

ASML - ASML Holdings

HFC - HollyFrontier

NS - NuStar Energy

UPS - United Parcel Service


Dropped Watch List Entries

AEM, EBAY, MA, MPC, and PFE have been removed.



New Watch List Candidates:


Agrium Inc. - AGU - close: 96.41

Company Info

Agrium is in the basic materials sector. The company produces crop nutrients, seeds, and agricultural chemicals, including phosphate, potash and more.

Last year the industry saw some volatility after Russia's Uralkali, a potash producer, decided to break up the Eastern Europe potash cartel. Now it sounds like they might rejoin the group. Meanwhile the potash market has been weak with prices at three-year lows. Analysts suggest that a delayed spring planting season due to a rough winter could rive up prices.

Long-term estimates suggest that food production will need to rise +60% over the near 36 years to feed the growing global population (currently 7.2 million people). This will require crop yield to double from their average annual increase of +1.2%. To do that farmers will need more fertilizer.

Technically shares of AGU have spent several months, building a massive base in the $80-95 zone. The most recent highs in early March produced a new bullish buy signal on the point & figure chart that is forecasting a long-term target of $121.00.

Tonight I am suggesting we wait for AGU to close above $97.50 and then buy calls the next day with a stop loss at $92.45. More conservative investors may want to wait for AGU to close above the $100.00 level as an alternative entry point since $100 could be round-number resistance.

Breakout trigger: Wait for AGU to close above $97.50
then buy calls the next day with a stop loss at $92.45.

BUY the 2015 Jan $110 call (AGU1517a110) current ask $2.40

- or -

BUY the 2016 Jan $110 call (AGU1615a110) current ask $6.10

Chart of AGU:

Originally listed on the Watch List: 03/30/14


Caterpillar Inc. - CAT - close: 99.39

Company Info

CAT is in the industrial goods sector. The company makes construction, farm, and mining equipment. The stock has been able to consistently shrug off bad news lately. Most recently are stories about a U.S. Senate subcommittee to look into CAT's offshore tax strategies scheduled for Tuesday, April 1st. These headlines have failed to stop the relative strength in CAT.

More importantly is the slowdown in China. CAT is the biggest maker of construction and mining equipment in the world and China is a major market for them. Lately the economic data out of China suggest their economy is slowing down. Yet slowing sales of CAT's equipment in China was last year's story. It seems these worries have all be baked into the stock already. News that China's government is ready to launch new infrastructure projects to boost the economy might be good news for CAT.

Technically the stock is pushing higher after a four-week consolidation above the $95.00 level. Now CAT is challenging resistance at $100.00. I am suggesting we wait for CAT to close above $101.00 and then buy calls the next day with a stop loss at $94.90. Our long-term target is the $115-125 zone. Currently CAT's point & figure chart is bullish with a $126 target.

Breakout trigger: Wait for CAT to close above $101.00
then buy calls the next day with a stop loss at $94.90.

BUY the 2015 Jan $110 call (CAT1517a110) current ask $2.68

- or -

BUY the 2016 Jan $110 call (CAT1615a110) current ask $6.25

Chart of CAT:

Originally listed on the Watch List: 03/30/14


Western Digital Corp. - WDC - close: 89.41

Company Info

WDC is in the technology sector. The company makes digital storage devices like hard drives and solid-state drives. For years there has been a worry about the death of the PC and its impact on hard drive sales. Yet this has failed to have an impact on WDC's stock price, currently sitting near all-time highs. That's because the world has a insatiable need for more digital storage.

New estimates suggest that between now and 2020 data storage needs to grow from just under 1,000 exabytes today to almost 6,000 exabytes. That's +34% a year. An exabyte is one million terabytes. One terabyte is one thousand gigabytes. FYI: The Library of Congress' digital collection is about 3,000 terabytes.

Thus far shares of WDC are outperforming the NASDAQ and its major rival Seagate (STX). Investors have shrugged WDC's Q1 earnings warning and pushed the stock to all-time highs. Technically WDC is in a long-term rising channel and looks poised to breakout past resistance near $90.

I am suggesting we wait for WDC to close above $91.25 and buy calls the next day with a stop loss at $85.75. If triggered our long-term target is $110. Currently the point & figure chart is bullish with a $108 target.

Breakout trigger: Wait for WDC to close above $91.25
then buy calls the next day with a stop loss at $85.75.

BUY the 2015 Jan $100 call (WDC1517a100) current ask $6.10

- or -

BUY the 2016 Jan $110 call (WDC1615a110) current ask $8.35

Chart of WDC:

Originally listed on the Watch List: 03/30/14


Active Watch List Candidates:



Agnico Eagle Mines - AEM - close: 31.29

Comments:
03/30/14: Last week was rather ugly for AEM with shares breaking down through multiple layers of support. The stock did bounce from the $30.00 level but we are removing AEM from the watch list. Our suggested entry point was a close over $35.50.

Trade did not open.

03/30/14 removed from the watch list.

Originally listed on the Watch List: 03/16/14


ASML Holdings - ASML - close: 91.83

Comments:
03/30/14: It was a relatively quiet week for ASML. The stock is testing short-term support at its 10-dma and the $92.00 level. I do not see any changes from my prior comments.

Earlier Comments:
The point & figure chart has recently turned bullish and forecasts a $110 price target (that could grow higher).

There are some concerns that expectations are currently too optimistic for the chip equipment companies. One of ASML's rivals, Taiwan Semiconductor Manufacturing (TSM), recently lowered its capacity over growth concerns.

I am suggesting small bullish positions on ASML if shares can close above $95.25. If triggered our long-term target is $119.50.

Breakout trigger: Wait for ASML to close above $95.25
then buy calls the next day with a stop loss at $89.00.

BUY the 2015 Jan $100 call (ASML1517a100)

- or -

BUY the 2016 Jan $105 call (ASML1615a105)

Remember, small positions to limit risk!

Originally listed on the Watch List: 03/23/14


eBay Inc. - EBAY - close: 55.19

Comments:
03/30/14: EBAY has had a rough go of it in March. The stock is down three weeks in a row after hitting multi-year highs in late February. We are removing EBAY from the watch list. Our suggested entry point was a close above $60.25.

Trade did not open.

03/30/14 removed from the watch list.

Originally listed on the Watch List: 03/09/14


HollyFrontier Corp. - HFC - close: 47.45

Comments:
03/30/14: The pullback in HFC pushed shares to their 50-dma before bouncing. We do not want to give up yet.

I am suggesting we wait for HFC to close above $50.50 and then buy calls the next day with a stop loss at $47.40. Our target is $59.50. More aggressive investors may want to aim higher since the point & figure chart is forecasting at $65 target.

Breakout trigger: Wait for HFC to close above $50.50
then buy calls the next day with a stop loss at $47.40.

BUY the 2015 Jan $55 call (HFC1517a55)

Originally listed on the Watch List: 03/23/14


Mastercard Inc. - MA - close: 73.22

Comments:
03/30/14: Momentum in MA has reversed sharply in the last several days. The failed rally under resistance at $80.00 has turned into a sell-off.

In December Visa and MA agreed to a $5.7 billion settlement with 19 merchants over card fees. Wal-Mart just launched their own individual $5 billion lawsuit against Visa. Investors might be worried that MA is next.

We are removing MA from the watch list. Our suggested entry point was a close above $80.00.

Trade did not open.

03/30/14 removed from the watch list.

Originally listed on the Watch List: 03/09/14


Marathon Petroleum - MPC - close: 87.67

Comments:
03/30/14: MPC has reversed from all-time highs and broke down under support near the $90.00 level. We're choosing to remove MPC from the watch list tonight. Our suggested entry point was a close above $95.00. I would still keep MPC on your radar screen.

Trade did not open.

03/30/14 removed from the watch list.

Originally listed on the Watch List: 03/16/14


NuStar Energy - NS - close: 55.00

Comments:
03/30/14: NS continues to show relative strength. I don't see any changes from my prior comments.

Earlier Comments:
Shares are on the move again and look poised to break out past key resistance at the $55.00 level. If the market turns more volatile NS could benefit from investors seeking safety in high-dividend plays. NS currently offers an 8% dividend.

I am suggesting investors buy calls if NS can close above $55.25. If triggered our target is $64.50. More aggressive investors with a longer time frame may want to aim higher since the point & figure chart is targeting an $87 target.

Breakout trigger: Wait for NS to close above $55.25
then buy calls the next day with a stop loss at $51.75.

BUY the 2015 Jan $55 call (NS1517a55) current ask $3.40

Originally listed on the Watch List: 03/23/14


Pfizer Inc. - PFE - close: 31.88

Comments:
03/30/14: The long-term trend for PFE is still bullish but the momentum has stalled. We're choosing to remove PFE from our watch list. Shares just aren't moving fast enough. Our suggested entry point was a close over $33.00.

Trade did not open.

03/30/14 removed from the watch list.
03/09/14 adjust the entry trigger to a close above $33.00 (instead of $32.75)
03/05/14 PFE closed @ 32.75 but not above $32.75, no trade.

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


United Parcel Service - UPS - close: 97.34

Comments:
03/30/14: UPS spent the past week consolidating sideways inside the $96-98 zone. I don't see any changes from my prior comments.

We are still waiting for a breakout higher. I am suggesting investors wait for UPS to close above $100.25 then buy calls the next day with a stop at $94.75. Our long-term target is the $115-120 zone.

Breakout trigger: Wait for a close above $100.25
then buy calls the next day with a stop loss at $94.75

BUY the 2015 Jan $105 call (UPS1517a105)

- or -

BUY the 2016 Jan $110 call (UPS1615a110)

Originally listed on the Watch List: 03/09/14