New Watch List Entries
BRK.B - Berkshire Hathaway
SRCL - Stericycle Inc.
Active Watch List Candidates
BVN - Compania de Minas Buenaventura
GILD - Gilead Sciences
HD - Home Depot
HUM - Humana Inc.
NVDA - NVIDIA Corp.
VMED - Virgin Media
WYNN - Wynn Resorts Ltd.
Dropped Watch List Entries
CHRW was removed.
New Watch List Candidates:
Berkshire Hathaway - BRK.B - close: 82.72 change: +0.41
Last week I listed BRK.B as a stock to watch in the new plays section. Shares have continued to show relative strength and the stock is up four weeks in a row. The breakout to new relative highs is encouraging but we don't want to chase it here. Wait for a little correction and then jump in. I'm suggesting a trigger to buy calls on BRK.B at $80.50. More patient traders could try waiting for another dip back toward the 50-dma near $79.00 instead. If triggered at $80.50 I'm suggesting a stop loss at $74.95. Our long-term target is $92.50 and $99.00. I prefer the 2012 calls.
Berkshire Hathaway and its subsidiaries engage in diverse business activities including property and casualty insurance and reinsurance, utilities and energy, freight rail transportation, finance, manufacturing, retailing and
services. Common stock of the company is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B. (source: company press release or website)
Buy-the-Dip trigger: $80.50
BUY the 2011 Jan. $85 calls (BRKB1122A85)
- or -
BUY the 2012 Jan $90 calls (BRKB1221A90)
Chart of BRK.B:
Stericycle - SRCL - close: 69.00 change: +0.87
Investors appear to be interested in medical waste disposal if shares of SRCL are any indication. The company does a lot more than waste removal unfortunately, paying a dividend is not one of those things. That hasn't stopped the stock from setting new all-time highs. After more than two months of consolidating near the $65 area it looks like SRCL is poised to move. We do not want to chase it here. Look for a dip back toward $66.00. We'll use a stop loss at $63.40. If triggered our long-term target is $79.00. However, we will have to adjust our exit point as SRCL does not have LEAPS. The longest dated options are 2011 Februarys.
We are a business services company that specializes in protecting people and reducing risk. We work with companies in a wide array of industries -- such as healthcare, manufacturing, and retail -- to improve employee and customer safety, ensure regulatory compliance, safely dispose of regulated materials, and manage corporate and personal risk. Our services include medical waste disposal and sharps disposal management, product recalls and retrievals, OSHA compliance training, pharmaceutical recalls and medical device returns, hazardous waste disposal, healthcare integrated waste stream management, pharmaceutical waste disposal, medical safety product sales, and high volume notification services. (source: company press release or website)
Buy-the-Dip trigger: $66.00
BUY the 2011 February $70 calls (SRCL1119B70)
Chart of SRCL:
Active Watch List Candidates:
Compania de Minas Buenaventura - BVN - close: 40.48 change: -0.09
I remain bullish on BVN we're just waiting for the right entry point. The stock's breakout in late August sparked a new buy signal but I didn't want to chase it. So far BVN is consolidating as expected with some round-number support at $40.00. I am suggesting we buy calls with a dip at $38.50. I'm crossing my fingers the stock doesn't rally from current levels without hitting our trigger first. There was some news late this weekend regarding China's economy that suggest the country's economy is still humming along and will probably see a soft landing. That should be a bullish development for the miners like BVN.
If we are triggered at $38.50 we want to use a stop loss at $34.75.
Our target is $47.50 but we might adjust it higher.
Buy-the-Dip trigger: $38.50
BUY the 2011 March $40 calls (BVN1119C40)
Chart of BVN:
CH Robinson Worldwide Inc. - CHRW - close: 67.50 change: -0.19
I am temporarily dropping CHRW as a watch list candidate. I remain long-term bullish on the stock but we've been waiting for an entry point for a long time and I don't want to chase it. I would keep it on your private watch list. A bounce from the $62.00 area could be our next entry point.
Gilead Sciences - GILD - close: 34.02 change: +0.87
Almost! GILD almost hit our trigger on September 7th but managed to bounce at $33.13. We have a trigger to buy calls at $33.00. Shares do look short-term bullish with the close over resistance near $34.00 and its 50-dma. However, I'm still expecting a market pull back so we'll keep our trigger at $33.00. GILD has been under performing its peers in the biotech sector but when biotechs rally I'm expecting GILD to try and "catch up" with its peers. FYI: I prefer the 2012 Calls.
Bear in mind this is an aggressive play. GILD is underperforming for a reason with a slowdown in sales growth and worries about how the new health reform will affect its business. The current set up seems to offer a relatively low risk entry point. There is clear support at $31.75. I'm suggesting we buy calls (small positions only) on a dip at $33.00. We'll use a stop loss at $31.49. If triggered our long-term target is $41.75.
Buy-the-Dip trigger: $33.00
BUY the 2011 Jan $35 calls (GILD1122A35)
BUY the 2012 Jan $35 calls (GILD1221A35)
Chart of GILD:
Home Depot - HD - close: 29.68 change: +0.27
Shares of HD have been consolidating sideways in a tight range. We can expect a break one way or the other pretty soon. I am still expecting a pull back toward $29.00 before HD moves higher. If triggered at $29.00 we'll use a stop loss at $26.90. More conservative traders may want to consider a trigger to launch bullish positions at $28.50 instead. If triggered our long-term target is $33.90 and $36.00. We can expect to find resistance near $32.00. I prefer the 2012 calls over the 2011 calls.
Buy-the-Dip trigger: $29.00
BUY the 2011 Jan $30.00 calls (HD1122A30)
BUY the 2012 Jan $30.00 calls (HD1221A30)
Chart of HD:
Humana Inc. - HUM - close: 52.78 change: +0.94
If you are an aggressive trader then HUM hit my alternative entry point to buy calls at $52.50 this past week. The stock certainly looks bullish with a breakout to new multi-year highs. I remain very positive on the stock but I don't want to chase it. Please note we are adjusting our entry point to buy calls from $49.00 to $50.50. If triggered at $50.50 we'll use a stop loss at $44.90. Our first long-term bullish target is $59.50. I'm listing the 2011 January calls but I prefer the 2012 Jan. calls.
Buy-the-Dip trigger: $50.50 *new*
BUY the 2011 Jan. $55 calls (HUM1122A55)
- or -
BUY the 2012 Jan. $55.00 calls (HUM1221A55)
Chart of HUM:
NVIDIA Corp. - NVDA - close: 10.07 change: -0.11
Almost triggered! NVDA rallied to $10.46 on Thursday but not quite enough to hit our trigger at $10.55. I considered dropping NVDA as a bullish candidate due to the relative weakness in the SOX semiconductor index. I do think the SOX is headed lower. However, NVDA has not been trading in line with the rest of the semiconductor group in a long time. I'm willing to keep NVDA as a candidate but we'll move the trigger to $10.75. More nimble traders could try and jump in on a dip or a bounce near $9.50 instead. If triggered we'll use a stop loss at $9.45.
This remains an aggressive, higher-risk trade. NVDA has been struggling and sales growth has been slowing down but we are betting the worse has already been priced in for this stock. Keep your positions very small to limit our risk. Our first target is $12.50. Our second, longer-term target is $14.00.
Breakout trigger: $10.75
BUY the 2011 Jan $10.00 calls (NVDA1122A10)
- or -
BUY the 2012 Jan $12.50 calls (NVDA1221A12.5)
Chart of NVDA:
Virgin Media - VMED - close: 21.73 change: +0.29
We raised our entry trigger to $20.50 last week but it wasn't enough. Traders bought the dip near $21.00. I am still hesitant to chase VMED here. We will keep our trigger at $20.50 and more conservative traders may want to use a trigger near the rising 50-dma instead. If triggered we'll start with a stop loss at $18.90. Our first long-term target is $24.00.
I prefer the 2012 LEAPS over the 2011s. FYI: The Point & Figure chart is forecasting a long-term target of $36.
FYI: Keep your position size smaller!
Buy-the-Dip trigger: $20.50
BUY the 2011 Jan $22.50 call (VMED1122A22.5)
BUY the 2012 Jan $25.00 call (VMED1221A25)
Chart of VMED:
Wynn Resorts - WYNN - close: 89.55 change: +0.71
The rally continues in WYNN. The stock traded over $90.00 this past week. Shares look short-term overbought and I'm expecting a correction back toward support near $85.00 and the 50-dma.
I am suggesting we open small positions on a dip at $85.00. If triggered we'll use a stop loss at $79.00. Our first target to take profits is $99.00. Longer-term we'll consider a target at $109. I prefer the 2012 calls over the 2011s but if you're just aiming for $99 the 2011s can work. Remember, small positions to limit your risk. This is an aggressive trade. WYNN can be a volatile stock.
Buy-the-Dip trigger: $85.00
BUY the 2011 Jan $90 calls (WYNN1122A90)
- or -
BUY the 2012 Jan $100 calls (WYNN1221A100)
Chart of WYNN: