New Watch List Entries

HES - Hess Corp.

JOY - Joy Global, Inc.


Active Watch List Candidates

ASML - ASML Holdings

HFC - HollyFrontier

UPS - United Parcel Service


Dropped Watch List Entries

AGU, CAT, NS, and WDC have all graduated to our play list.



New Watch List Candidates:


Hess Corp. - HES - close: 85.34

Company Info

HES is in the basic materials sector. They are an oil and gas company. The latest earnings report in late January was a bit disappointing but that hasn't stopped the rebound in HES. Wall Street seems to be applauding their decision to focus on one business. In early January HES announced they would spin off their refining and retail division to focus on being an oil exploration and production company. The new company, Hess Retail Corp. (new symbol: HRE) will have over 1,250 convenience store locations, mostly along the east coast. There is no date yet set for this spin off. Meanwhile the company is doing well with its Bakken shale resources and plans to focus 2014 on the Gulf of Mexico, Malaysia, and West Africa.

Technically HES has been showing relative strength and just hit new multi-year highs this past week. The stock does have significant resistance in the $87.00 area. I am suggesting we wait for HES to close above $87.50 and then buy calls the next morning with a stop loss at $81.75.

I suspect the $100 level could prove to be round-number resistance but our long-term target will be $109.00.

FYI: HES is scheduled to report earnings on April 30th.

Breakout trigger: Wait for HES to close above $87.50
then buy calls the next day with a stop loss at $81.75.

BUY the 2015 Jan $95 call (HES1517a95) current ask $2.58

- or -

BUY the 2016 Jan $100 call (HES1615a100) current ask $5.35

Chart of HES:

Originally listed on the Watch List: 04/06/14


Joy Global Inc. - JOY - close: 59.73

Company Info

JOY is in the industrial goods sector. The company makes mining equipment for the coal, copper, gold, iron, oil sands, and more. The stock is a long way from its 2011 highs near $100 a share. That's because the mining industry has had its share of ups and downs. JOY is dealing with what appears to be a worldwide trend to move away from coal.

It is starting to look like all the bad news for JOY is baked into the stock. Shares found support and have slowly been working their way higher. The company reported earnings in early March and missed Wall Street's bottom line estimate while beating the top line number. Investors seem to be ignoring JOY's falling margins and revenue numbers. Possibly due to somewhat bullish guidance from JOY's management.

The stock has been outperforming the market with a three-week rally. Now shares are poised for a bullish breakout past resistance near $60.00. I do consider this a more aggressive, higher-risk trade since the outlook for JOY seems a bit murky. Technically the stock is saying it wants to go higher.

Normally I suggest a trigger where we wait for the stock to close above a certain level. Today I am suggesting an intraday trigger to buy calls on JOY at $60.75. I'm not setting a long-term exit target yet but probably somewhere in the $75-80 zone. If triggered we will start with a stop loss at $55.75.

Breakout trigger: $60.75 *small positions to limit risk*

BUY the 2015 Jan $65 call (JOY1517a65) current ask $4.00

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BUY the 2016 Jan $70 call (JOY1615a70) current ask $5.50

Chart of JOY:

Originally listed on the Watch List: 04/06/14


Active Watch List Candidates:



ASML Holdings - ASML - close: 90.82

Comments:
04/06/14: I am starting to lose faith that ASML is strong enough. Shares are falling toward support near $90.00 and its 200-dma. If shares close below this level we'll drop it as a watch list candidate.

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


HollyFrontier Corp. - HFC - close: 47.93

Comments:
04/06/14: Let's give HFC another week. If the stock doesn't improve by next weekend then we'll remove it as a watch list candidate.

Earlier Comments:
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


United Parcel Service - UPS - close: 98.10

Comments:
04/06/14: UPS managed a gain for the week. The stock struggled with technical resistance at its 100-dma on Friday morning. I don't see any changes from my prior comments.

Earlier Comments:
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