New Watch List Entries
FO - Fortune Brands Inc.
V - Visa Inc.
XHB - S&P Homebuilder ETF
Active Watch List Candidates
FXB - CurrencyShares British Pound
Dropped Watch List Entries
CELG and DLX both graduated from the watch list to the play list.
AKAM, MSFT, PETM, and PNRA were removed.
WMT was promoted to the play list tonight.
New Watch List Candidates:
Fortune Brands - FO - close: 46.42 change: +1.22
The RLX retail index has broken out to new multi-year highs in spite of persistently high unemployment levels. I'm suggesting we take a look at a consumer goods company that could ride this wave higher in the retailers. Shares of FO have been building on a trend of higher lows and they're now poised to breakout over resistance in the $46.50-47.00 region.
I am suggesting a trigger to buy calls at $47.55. If triggered our long-term target is $62.00. We'll use a stop loss at $39.95 to start.
Fortune Brands, Inc. is a leading consumer brands company. Its operating companies have premier brands and leading market positions in distilled spirits, home and security, and golf products. Beam Global Spirits & Wine, Inc. is the company's premium spirits business. Major spirits brands include Jim Beam and Maker's Mark bourbon, Sauza tequila, Canadian Club whisky, Courvoisier cognac, Cruzan rum, Teacher's and Laphroaig Scotch, EFFEN vodka and DeKuyper cordials. The brands of Fortune Brands Home & Security LLC include Moen faucets, Aristokraft, Omega, Diamond and Kitchen Craft cabinetry, Therma-Tru door systems, Simonton windows, Master Lock security products and Waterloo storage and organization products. Acushnet Company's golf brands include Titleist, Cobra and FootJoy. Fortune Brands, headquartered in Deerfield, Illinois, is traded on the New York Stock Exchange under the ticker symbol FO and is included in the S&P 500 Index and the MSCI World Index.
(source: company press release or website)
Breakout trigger: $47.55
FO doesn't have any LEAPS so we're suggesting the Septembers.
BUY the 2010 Sep. $50 calls (FO1018I50)
Chart of FO:
Visa Inc. - V - close: 88.51 change: +1.47
We are quickly moving to a cashless society with more and more people using their credit or debit cards for all their transactions. Visa is at the forefront of this change and the stock is looking very strong. Shares have rallied toward their all-time highs and resistance near $90.00. Odds are good that Visa will manage to breakout this time.
I am suggesting a trigger to buy call LEAPS at $91.00. If triggered our first target is $109.00 even though I do expect some resistance at $100.00. Investors might want to consider the 2012 LEAPS instead.
Visa is a global payments technology company that connects consumers, businesses, banks and governments in more than 200 countries and territories, enabling them to use digital currency instead of cash and checks. Visa has built one of the worldâ€™s most advanced processing networks, capable of handling more than 10,000 transactions per second, with reliability, convenience and security. Visa does not issue cards, extend credit or set rates and fees for consumers
(source: company press release or website)
Breakout trigger: $91.00
BUY the 2011 Jan. $100 calls (VSK1122A100)
Chart of V:
Homebuilders ETF - XHB - close: 16.57 change: +0.31
I have my doubts about the homebuilders later this year and the next due to rising tide of foreclosures. However, the sector has fought back from the grave and the worst year on record. Now the XHB looks downright bullish after months of consolidating under resistance in the $16-17 zone. Investors are betting that the major builders have learned their lesson, cut expenses to the bone, and should come out a much leaner, much more profitable sector as we approach the spring and summer home selling season.
The September 2009 high was $16.75. I am suggesting we buy call LEAPS on the XHB if the ETF can hit $17.05. If triggered our first target is $21.00. Our second target is $23.90. We'll use a stop at $14.49.
The SPDR S&P Homebuilders exchange traded fund seeks to mimic the performance of the S&P homebuilders industry index.
Breakout trigger: $17.05
BUY the 2011 Jan $17.50 calls (XJL1122A17.5)
BUY the 2012 Jan $20.00 calls (KHG1221A20)
Chart of XHB:
Active Watch List Candidates:
AKAMAI Tech. - AKAM - $29.20 +0.93
AKAM has exploded higher this past week. Shares are at new 52-week highs. We don't want to chase it. I was hoping we could jump in on a dip near the 200-dma but doesn't look like it will happen any time soon.
While I remain bullish on AKAM I would not open long-term positions at this time so I'm removing it from the watch list - at least for now. Our trigger at $22.50 was never hit.
FXB - CurrencyShares British Pound Sterling $150.92 +1.06
The rally in the dollar looks a little tired and the FXB is starting to bounce from oversold levels. The trend is still down but we don't want to launch positions here. Look for a bounce toward resistance in the $156-158 zone. More conservative traders are going to want to wait for the bounce to roll over first before initiating positions. Right now our plan is to buy long-term puts at $156.50. If triggered we'll use a stop loss at $160.55.
Our first target is $150.00. Our second target is $144.00.
Buy-the-Bounce trigger: $156.50
BUY the 2010 September $150 put (FWK1018U150)
Chart of FXB:
Microsoft - MSFT - close: $28.59 change: -0.04
I am concerned about MSFT. The market surges higher last week and shares of MSFT failed to participate. I am temporarily removing MSFT from the watch list although I will personally be watching it for a dip toward the $26-25 zone. Our trigger to buy LEAPS at $26.50 has not been hit yet.
PETsMART Inc. - PETM - close: 30.27 change: +0.34
Shares of PETM gapped open higher on Thursday following its better than expected earnings report and Q1 guidance. The stock rallied past resistance in the $27.50-29.00 region. Shares are too overbought now to open long-term positions. I'm temporarily removing PETM from the watch list. Our trigger to buy calls at $24.50 was never hit.
Panera Bread Co. - PNRA - close: 78.04 change: +4.00
The lack of news behind PNRA's rally on Friday is a mystery. I suspect that once shares got past resistance at $75.00 the rally turned into a short squeeze. While I am bullish on PNRA this is not an entry point for a long-term bullish position. Shares remain very overbought. Short-term traders may want to consider buying some calls on a dip or bounce near $75.00. I am removing PNRA from the watch list but will keep it on my personal watch list. Our trigger to buy calls at $65.50 was never hit.
Wal-Mart Stores Inc. - WMT - close: 54.14 change: +0.18
I am disappointed that WMT did not show more strength during last week's rally but I remain bullish on the stock, especially longer-term. We are going to promote WMT from the watch list to the play list tonight.