New Watch List Entries
BVN - Compania de Minas Buenaventura
MCD - McDonald's Corp.
Active Watch List Candidates
CRM - Salesforce.com
CRS - Carpenter Technology
GLD - SPDR Gold ETF
WYNN - Wynn Resorts Ltd.
Dropped Watch List Entries
RIG and RT graduated to the play list last week.
BA and UNG were promoted to a new play.
HSY was dropped as a watch list candidate.
New Watch List Candidates:
Compania de Minas Buenaventura - BVN - close: 38.46 change: -0.24
BVN is a mining company based in Peru. They mine for gold, silver, zinc, copper and more. There are plenty of disagreements about the prospects for global growth. Europe and the U.S. are facing challenges but large chunks of the world are still growing, which should bode well for commodity demand. I like BVN because the stock has been forming a HUGE cup-and-handle formation. Right now it's rising up toward the last section of the "handle" part of the formation. More cautious (and patient) traders could wait for a close over $42.50 before launching bullish positions. I want to jump in early. The $35.00 level should be short-term support. Let's use a trigger at $35.15 to open bullish positions. Unfortunately we don't have any LEAPS so the longest-dated options available are December 2010 calls. If triggered we'll use a stop loss at $29.90. Our first target is $42.25. Our second, more aggressive target is $47.50.
Buenaventura is Peru's largest publicly-traded precious metals company and a major holder of mining rights in Peru. The Company is engaged in the mining, processing, development and exploration of gold, silver and other metals via wholly-owned mines, as well as through its participation in joint exploration projects. Buenaventura currently operates seven mines in Peru (Orcopampa, Uchucchacua, Antapite, Julcani, Recuperada, Shila-Paula and Ishihuinca), has controlling interests in one mining company (El Brocal) and minority interests in other mining companies in Peru.
(source: company press release or website)
Buy-the-Dip trigger: $35.15
BUY the 2010 December $40 calls (BVN1018L40)
Chart of BVN:
McDonald's Corp. - MCD - close: 69.54 change: +0.17
MCD is an American icon and the company continues to put up strong overseas sales growth. The stock hit new all-time highs back in April and the correction has been relatively mild. Traders have been buying the dips near $66 the last couple of weeks. I'd like to take advantage of the next dip if MCD produces one. Use a pull back into the $66-65 zone as a bullish entry point. Our official trigger is $66.50. We will use a stop loss at $63.25, just under the 200-dma. Our long-term target is $79.75.
McDonald's USA, LLC, is the leading foodservice provider in the United States serving a variety of wholesome foods made from quality ingredients to more than 26 million customers every day. Nearly 90 percent of McDonald's 14,000 U.S. restaurants are independently owned and operated by local business men and women.
(source: company press release or website)
Buy-the-Dip trigger: $66.50
BUY the 2011 January $70 calls (MCD1122A70)
- or -
BUY the 2012 January $80 calls (MCD1221A80)
Chart of MCD:
Active Watch List Candidates:
Salesforce.com - CRM - close: 96.64 change: +4.22
Shares of CRM continue to outshine the rest of the market. The relative strength has pushed CRM to new all-time highs as it near the $100 mark. It's enough to make one regret not buying the dip near $76-75. I don't want to chase CRM at these levels but we will raise our trigger to buy the next correction. Our new entry point is $81.00. I expect CRM to tag the $100 level and correct. The question is will it breakdown under what should be new support near $90.00.
If triggered our stop loss is $74.00. Our new long-term target is $119.00.
Buy-the-Dip trigger: $81.00
BUY the 2011 January $85 calls (CRM 11A85.00)
- or -
BUY the 2012 January $90 calls (CRM 12A90.00)
Chart of CRM:
Carpenter Technology - CRS - close: $38.99 change +2.26
I'm not quite ready to chase the rebound in CRS yet. The huge rebound this past week looks like short covering. More aggressive traders may want to consider bullish positions on a close over $40.00. I'm suggesting we up our trigger to buy a dip to $33.00 and we'll raise our stop loss to $29.40.
Our long-term target is $44.75. Maybe by the time CRS finally hits our trigger the January calls will become available.
Buy-the-Dip trigger: $33.00
BUY the 2010 December $35 calls (CRS 10L35.00)
Chart of CRS:
SPDR Gold ETF - GLD - close: 120.01 change: +1.04
The debt challenges in Europe and the growing concern over the banking system is not going to be solved for a long time. That will continue to put pressure on the Euro and increase investors concerns. The trend for gold is up but we don't want to chase it here.
I'm suggesting a trigger to open positions at $115.00. More nimble traders could try and launch positions in the $112-110 zone. If triggered I'm suggesting a stop loss at $107.75, which is under the 200-dma.
Buy-the-Dip trigger: $115.00
BUY the 2010 March $120 call (GLD 11C120.00)
- or -
BUY the 2012 Jan. $130 call (GLD 12A130.00)
Chart of GLD:
Hershey Co. - HSY - close: 50.77 change: -0.99
I'm temporarily giving up on HSY. The stock has continued to outperform, which is very encouraging but we just don't want to chase it at these levels. I would still keep it on your personal watch list. I might reconsider new bullish positions on a bounce from $48 or the $45 areas. Our trigger at $42.50 was never hit.
Wynn Resorts - WYNN - close: 82.83 change: +1.49
I am going to turn more aggressive on WYNN. This is already an aggressive trade on a volatile stock but I think shares of WYNN are poised to breakout higher from their six-week consolidation. Keep positions very small. If WYNN reverses it is going to move fast!
I'm suggesting two different entry points depending on how WYNN trades. If the stock breaks out higher we'll use an entry point at $87.75 to buy calls. Our long-term target is $112.50. If WYNN dips first then we'll use a trigger at $76.00. If triggered at $76.00 our stop loss will be $69.75. If triggered at $87.75 our stop loss will be $79.45.
Note: Back in November 2009 WYNN declared a special cash dividend of $4.00 a share, that was payable in December 2009. They adjusted the option symbols to reflect this cash dividend. We want to use the normal call LEAPS with the VEG root symbol.
Buy-the-Dip trigger: $76.00 or Break-out trigger: $87.75
BUY the 2011 January $90.00 calls (WYNN 11A90.00)
BUY the 2012 January $100.00 calls (WYNN 12A100.00)
Chart of WYNN: