Please note that last week in my editors note I listed AXO as a possible short-term trade. I meant to type AZO. Right now AZO looks a little too extended after hitting another round of record highs. I wouldn't trade it now but it's worth putting on your watch list.
New Watch List Entries
MA - Mastercard Inc.
Active Watch List Candidates
BVN - Compania de Minas Buenaventura
CRM - Salesforce.com
GLD - SPDR Gold ETF
Dropped Watch List Entries
MET has been dropped.
New Watch List Candidates:
Mastercard Inc. - MA - close: 197.22 change: -14.59
Weakness in the financials combined with the sour consumer sentiment data and produced a double-whammy for MA. Shares collapsed for a 6.8% decline. I think Friday's move looks a little overdone. We don't want to chase it. However, the trend is down. Not only has MA produced a bearish double top with the January and April peaks but shares also saw the rally fail at its 50-dma in June. Now MA has produced a bearish head-and-shoulders pattern. A breakdown under the June low would be very bearish!
I am suggesting a trigger to open PUT LEAP positions at $192.40. If triggered we'll use a white stop loss at $212.25. Our first target is $161.00. FYI: MA is due to report earnings on August 3rd.
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 22 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCardÂ®, MaestroÂ® and CirrusÂ®, MasterCard serves consumers and businesses in more than 210 countries and territories. (source: company press release or website)
Break Down trigger: $192.40
I prefer the 2012 PUT LEAPS but the 2011 PUTS should also work well.
Keep your positions small. MA can be a very volatile stock!
BUY the 2011 Jan $180 PUT LEAPS (MA1122M180)
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BUY the 2012 Jan $160 PUT LEAPS (MA1221M160)
Chart of MA:
Active Watch List Candidates:
Compania de Minas Buenaventura - BVN - close: 38.32 change: -1.03
The rally in BVN stalled at resistance near the $40.00 level, which isn't that surprising. We have been expecting a correction. I don't see any changes from my prior comments. More aggressive traders may want to look for an entry point near $35.00. I think BVN might over correct so we're listing a trigger to open bullish positions at $32.00.
If triggered at $32.00 we'll use a stop loss at $29.49.
Our first target is $42.25. Our second, more aggressive target is $47.50.
Buy-the-Dip trigger: $32.00
BUY the 2010 December $40 calls (BVN1018L40)
Chart of BVN:
Salesforce.com - CRM - close: 92.05 change: -3.94
Shares of CRM were upgraded on Wednesday but it was not enough to push the stock past resistance near its 2010 highs. The action on Friday looks like CRM could be forming a possible double top. Short-term I would expect a correction. Longer-term I'm still bullish on CRM. The stock is prone to bouts of volatility and I suspect if we're patient we may get an entry point near the 200-dma around the $75 area.
Right now our suggested trigger to buy call LEAPS is $76.00. If triggered we'll use a stop loss at $69.00. Our first long-term target is $97.00. Our second target is $119.00.
Buy-the-Dip trigger: $76.00
BUY the 2011 January $80 calls (CRM 11A80.00)
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BUY the 2012 January $90 calls (CRM 12A90.00)
Chart of CRM:
SPDR Gold ETF - GLD - close: 116.67 change: -1.56
Normally a weaker dollar is bullish for commodities, including gold. Yet the recent plunge in the dollar has not had much affect on gold or the GLD. Instead gold and the GLD are facing some profit taking. It looks like the GLD may have just produced a bear-flag pattern. If that is true then this pattern is forecasting a correction toward the $112 area, which is perfect for us. I am suggesting a trigger to open bullish positions at $112.50.
If triggered we'll use a stop loss at $107.40.
Our target is $140.
Buy-the-Dip trigger: $112.50
BUY the 2010 March $120 call (GLD 11C120.00)
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BUY the 2012 Jan. $130 call (GLD 12A130.00)
Weekly Chart of GLD:
MetLife Inc. - MET - close: 37.80 change: -1.29
MET has been under performing. The stock produced a new lower high this past week. I am dropping it as a bullish candidate. The plan was to use a trigger at $43.25.
Our trade never opened.