New Watch List Entries


None, no new watch list candidates



Active Watch List Candidates

IP - Intl. Paper Co.

NEM - Newmont Mining


Dropped Watch List Entries

UNP and WLP have graduated to our active play list.

VFC has been removed.



New Watch List Candidates:


No new watch list candidates tonight.

This week could be an inflection point for the market. Hundreds of companies will report earnings. Most of the watch list candidates I would like to add will be announcing earnings in the next two weeks. It might be best to wait for the post-earnings dust to settle before adding new trades.

Active Watch List Candidates:



International Paper Co. - IP - close: 49.70

Comments:
07/20/14: IP is holding up reasonably well. The stock has been consolidating sideways near resistance around the $50.00 level. I don't see any changes from my earlier comments.

FYI: IP is scheduled to report earnings on July 29th.

Earlier Comments: July 13, 2014:
IP has come a long way from its 2009 bottom at $4.00 a share. Today the stock is sitting on $50.00 and looks poised to hit new multi-year highs.

IP is not the same company they used to be. They have sold off their forestry, wood products, and chemical business. Earlier this month they just completed a spinoff of its distribution solutions business, xpedx. Now IP is focused on its core business of making paper and packaging.

IP is also focused on shareholder value. The stock currently sports a 2.9% dividend yield. Management recently announced they have doubled their stock buyback program to $1.5 billion. The company spent $461 million last year on stock buybacks.

Technically shares of IP have been consolidating sideways for months. It looks like the consolidation is about over. The early July high was $51.00. I am suggesting we wait for IP to close above $51.00 and buy calls the next morning with a stop loss at $47.40. Our long-term target is the $60.00 level.

Breakout trigger: Wait for a close above $51.00
then buy calls the next morning with a stop at $47.40.

BUY the 2015 Jan $50 call (IP150117c50)

- or -

BUY the 2016 Jan $55 call (IP160115c55)

Option Format: symbol-year-month-day-call-strike

Originally listed on the Watch List: 07/13/14


Newmont Mining Corp. - NEM - close: 25.42

Comments:
07/20/14: Gold prices were crushed lower last Monday but the commodity was starting to rebound toward the end of the week. Meanwhile the weakness in gold didn't have that big of an impact on NEM.

This stock is still consolidating sideways below resistance near $26.00. I don't see any changes from my earlier comments.

FYI: NEM is scheduled to report earnings on July 29th.

Earlier Comments: July 13, 2014:
According to the company website, Newmont Mining Corporation is primarily a gold producer, with significant assets or operations in the United States, Australia, Peru, Indonesia, Ghana, New Zealand and Mexico. Founded in 1921 and publicly traded since 1925, Newmont is one of the world's largest gold producers and is the only gold company included in the S&P 500 Index and Fortune 500. Headquartered near Denver, Colorado, the company has around 32,000 employees and contractors worldwide.

NEM also produces copper and silver but they are the second biggest gold producer on the planet by production. The biggest gold producer is Barrick Gold Corp. (ABX) and NEM almost merged with ABX in April this year but discussions fell apart. NEM investors either want the company to resume talks with ABX or break itself up to unlock shareholder value. That seems unlikely but JPMorgan believes the deal talks with ABX may not be dead.

I like NEM more for the technical set up on the charts. It's true that gold has been in rally mode, currently up six weeks in a row and up +10% for the year. Yet the gold miners have been outperforming and the GDX gold miner index is up +29% this year. NEM is only up +12.5% this year but it could play catch up if shares break out from its base.

The stock has been building a base in the $21-26 zone for months. I am suggesting we wait for NEM to close above $26.75 and then buy calls the next morning with a stop loss at $23.75. I would consider this a more aggressive, higher-risk trade because gold and the gold miners can be a volatile group. You may want to limit your position size to reduce your risk.

Breakout trigger: Wait for a close above $26.75
then buy calls the next morning with a stop at $23.75.

BUY the 2015 Jan $30 call (NEM150117c30)

- or -

BUY the 2016 Jan $30 call (NEM160115c30)

Option Format: symbol-year-month-day-call-strike

Originally listed on the Watch List: 07/13/14


V.F. Corp. - VFC - $60.95

Comments:
07/20/14: I am pulling the plug on our VFC watch list candidate. We've been patiently waiting for a breakout past resistance near $64.00 but that seems unlikely any time soon. Shares started underperforming last week.

Trade did not open.

07/20/14 removed from the watch list, suggested entry point was a close above $64.25

Originally listed on the Watch List: 05/18/14