New Watch List Entries
F - Ford Motor Co.
WLL - Whiting Petroleum
WLP - WellPoint Inc.
Active Watch List Candidates
BRK.B - Berkshire Hathaway
BVN - Compania de Minas Buenaventura
CERN - Cerner Corp
DE - Deere & Co
HD - Home Depot
NKE - Nike Inc.
NOK - Nokia Corp
SRCL - Stericycle Inc.
WYNN - Wynn Resorts Ltd.
Dropped Watch List Entries
AKAM graduated to the play list. VMED was removed.
New Watch List Candidates:
Ford Moto Co. - F - close: 13.78 change: +0.12
Ford continues to fire on all cylinders. The stock has exploded higher last week after a two-week consolidation. Now shares are hitting new five-month highs as the company announces record-setting sales numbers for their operations in the Asia Pacific region and the Africa region. More specifically Ford said sales in China saw a +26% jump from September a year ago and for the first three quarters of the year their China sales are up +40%. In India Ford's sales doubled from a year ago.
We do not want to chase the current rally. Ford will eventually see another pullback. I'm suggesting we use a trigger at $12.75 to launch new long-term bullish positions. If triggered we'll use a stop loss at $10.90. Our first upside target is $14.40. Our second, longer-term target is $17.40. FYI: The Point & Figure chart is bullish with a $19.50 target.
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 159,000 employees and about 70 plants worldwide, the company's automotive brands include Ford, Lincoln and Mercury, production of which has been announced by the company to be ending in the fourth quarter of 2010. The company provides financial services through Ford Motor Credit Company. Ford's wholly owned subsidiaries, joint ventures and investment in China include Ford Motor (China) Limited, Ford Motor Research & Engineering (Nanjing) Co., Ltd., Ford Automotive Finance (China) Ltd., Changan Ford Mazda Automobile Co., Ltd., Changan Ford Mazda Automobile Co., Ltd. Nanjing Company, Changan Ford Mazda Engine Co., Ltd. and Jiangling Motors Co., Ltd
(source: company press release or website)
Buy-the-Dip trigger: $12.75
I prefer the 2012 calls.
BUY the 2011 March 13.00 calls (F1119C13)
- or -
BUY the 2012 January $12.50 calls (F1221A12.5)
Chart of F:
Whiting Petroleum Corp. - WLL - close: 103.67 change: +0.16
The trend for oil stocks is up and shares of WLL have been outperforming many of its peers, especially following the breakout past resistance in the $93-94 zone. On a short-term basis crude oil and oil stocks are overbought. When the dollar eventually bounces oil should contract and that could spark some profit taking in the oil sector. We want to be ready. Look for a dip to $95.50 as an entry point to launch bullish positions in WLL. If triggered our stop loss is $89.40. Our first upside target is $109.00.
Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that acquires, exploits, develops and explores for crude oil, natural gas and natural gas liquids primarily in the Permian Basin, Rocky Mountains, Mid-Continent, Gulf Coast and Michigan regions of the United States. (source: company press release or website)
Buy-the-Dip trigger: $95.50
I prefer the 2012 calls but the spreads are a little wide!
BUY the 2011 January $100 calls (WLL1122A100)
- or -
BUY the 2012 January $110 calls (WLL1221A110)
Chart of WLL:
WellPoint Inc. - WLP - close: 55.39 change: +0.38
WLP broke out to new four-month highs back in September and the move followed an inverse H&S pattern (bullish) created over the prior four months. When traders bought the dip at the rising 50-dma last week it looked like a bullish entry point to jump on board this healthcare stock. However, WLP did struggle with resistance near $57 and its simple 200-dma. While I am tempted to buy call LEAPS on WLP right here I would prefer to wait for a new relative high. I'm suggesting a trigger to launch positions at $57.75. If triggered we'll use a stop loss at $52.75, under the recent low. Our long-term target is $69.75.
WellPoint works to simplify the connection between Health, Care and Value. We help to improve the health of our communities, deliver better care to members, and provide greater value to our customers and shareholders. WellPoint is the nation's largest health benefits company, with more than 33 million members in its affiliated health plans, and a total of more than 69 million individuals served through all subsidiaries. As an independent licensee of the Blue Cross and Blue Shield Association, WellPoint serves members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as the Blue Cross Blue Shield licensee in 10 New York City metropolitan and surrounding counties and as the Blue Cross or Blue Cross Blue Shield licensee in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), and Wisconsin. In a majority of these service areas, WellPoint does business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield or Empire Blue Cross Blue Shield (in the New York service areas). WellPoint also serves customers throughout the country as UniCare (source: company press release or website)
Breakout trigger: $57.75
BUY the 2012 January $65 calls (WLP1221A65)
Chart of WLP:
Active Watch List Candidates:
Berkshire Hathaway - BRK.B - close: 82.95 change: -0.21
Not much has changed for BRK.B. Shares are still consolidating sideways. I am keeping our buy the dip strategy but I'm lowering it to $79.00. However, I'm also adding a breakout entry point. If we see BRK.B close over $84.25 then we will launch bullish positions the next morning (but only half your normal position size).
If triggered at $79.00 we'll use a stop loss at $74.40. If triggered above $84.25 then we'll use a stop loss at $79.40. Depending on our entry point our long-term targets are $92.50 and $99.00. I prefer the 2012 calls.
Buy-the-Dip trigger: $79.00 or buy when BRK.B closes over $84.25.
BUY the 2011 Jan. $85 calls (BRKB1122A85)
- or -
BUY the 2012 Jan $90 calls (BRKB1221A90)
Chart of BRK.B:
Compania de Minas Buenaventura - BVN - close: 48.99 change: +0.67
Wow! Shares of BVN have continued to soar. Shares are hitting new all-time highs. I'm tempted to drop it since the stock is running away without us. Instead I'm going to adjust our entry point. We will look to buy calls on a dip to $44.00 but we'll raise our stop loss to $39.90 and I'm suggesting we only buy half our normal position since this is turning into a more aggressive trade.
Buy-the-Dip trigger: $44.00 (half a position)
BUY the 2011 March $50 calls (BVN1119C50)
Chart of BVN:
Cerner Corp. - CERN - close: 85.67 change: -0.57
There is not much change in CERN. Shares have continued to consolidate sideways in the $84-86 zone. We still don't want to chase it. I am suggesting we launch bullish positions on a dip to $82.00.
If triggered we'll use a stop loss at $77.90. Our first long-term target is $89.50. FYI: CERN is due to report earnings on Oct. 27th (unconfirmed).
Buy-the-Dip trigger: $82.00
BUY the 2011 January $85 calls (CERN1122A85)
- or -
BUY the 2012 January $90 calls (CERN1221A90)
Chart of CERN:
Deere & Co - DE - close: 75.31 change: -0.04
I am also tempted to give up on DE with the stock running away without us. Stocks in the agriculture space exploded higher last week on the USDA crop report. Yet I still don't want to chase DE. We will adjust our entry point. Move the trigger to launch bullish positions to $70.00 and adjust the stop loss to $65.95. If triggered I would only open half your normal position since this is turning into a more aggressive trade.
I prefer the 2012 LEAPS over the 2011 options.
FYI: keep an eye on the U.S. dollar. When the oversold dollar bounces anything related to commodities could see a sell-off.
Buy-the-Dip trigger: $70.00 (only half a position)
BUY the 2011 March $75.00 calls (DE1119C75)
- or -
BUY the 2012 January $75.00 calls (DE1221A75)
Chart of DE:
Home Depot - HD - close: 31.79 change: -0.10
Shares of HD have spent just over two weeks now consolidating sideways under resistance near $32.00. More aggressive traders may want to seriously consider a breakout entry point to launch positions on a move over $32.50. I don't want to chase HD at this time so I'm suggesting we stick to the plan and wait for a dip to $30.00. If triggered our stop is $27.90. Our long-term target is $33.90 and $36.00. I prefer the 2012 calls over the 2011 calls.
Buy-the-Dip trigger: $30.00
BUY the 2011 Jan $30.00 calls (HD1122A30)
BUY the 2012 Jan $30.00 calls (HD1221A30)
Chart of HD:
Nike Inc. - NKE - close: 81.98 change: -0.06
Shares of NKE have continued to inch higher and closed at new all-time highs on Friday. We don't want to chase it here but I do want to adjust our trigger higher. Adjust the entry point to $76.50 and adjust the stop loss to $71.90.
Our long-term target is $98.00. I prefer the 2012 calls but more aggressive traders may want to use the 2011 calls and just exit early near $89 instead.
EDIT: After hours it was announced that NKE will become the official apparel maker for the NFL. Shares of NKE are trading higher after hours near $85. (I still would not chase it)
Buy-the-Dip trigger: $76.50
BUY the 2011 Jan $80 calls (NKE1122A80)
- or -
BUY the 2012 Jan $90 calls (NKE1221A90)
Chart of NKE:
Nokia Corp. - NOK - close: 10.96 change: +0.13
As the smartphone competition heats up with Microsoft launching its Windows 7 phones, shares of NOK have continued to climb. The stock has reached potential resistance near $11.00 and its exponential 200-dma. I would expect some profit taking soon. I am more optimistic about NOK so we will update our trigger to launch bullish positions from $9.85 to $10.05. More aggressive traders could jump in near $10.30 instead.
If triggered we'll use a stop loss at $9.45.
Our first long-term target is $11.85.
Buy-the-Dip trigger: $10.05 *updated*
I prefer the 2012 calls over 2011 calls.
BUY the 2011 January $10.00 calls (NOK1122A10)
- or -
BUY the 2012 January $10.00 calls (NOK1221A10)
Chart of NOK:
Stericycle - SRCL - close: 71.16 change: -0.49
SRCL tagged new highs again last week. The trend is up but we don't want to chase it (you've heard that before, right?). I am moving our trigger to buy the dip up from $66.00 to $67.00. We'll move our stop loss to $63.40.
If triggered our long-term target is $79.00.
Buy-the-Dip trigger: $67.00 *updated*
BUY the 2011 May $70 calls (SRCL1119E70)
Chart of SRCL:
Virgin Media - VMED - close: 23.83 change: -0.13
I am giving up on VMED as a bullish candidate for now. Shares have continued to perform well and the trend is still very much up. Yet even on a pull back to what should be support near $22.00 the stock would still seem overbought. I'm placing it on my personal watch list for a correction so we'll wait and see but I want to make room on the watch list for new candidates.
Wynn Resorts - WYNN - close: 87.09 change: +0.32
Casino stocks were big winners on Friday thanks to positive comments from the Nevada Gaming Commission. The rally accelerated on Monday, probably due to lots of short covering as WYNN broke out past resistance. I remain very bullish on WYNN but we don't want to chase it, especially today. Broken resistance near $95.00 should be new support. I'm suggesting we move our trigger to launch bullish positions to $95.50. We'll move our stop loss to $87.99. If triggered at $95.50 we only want to open half our normal position size since this is an aggressive trade.
Buy-the-Dip trigger: $95.50 (small positions!) *updated*
BUY the 2011 Jan $100 calls (WYNN1122A100) *updated*
- or -
BUY the 2012 Jan $105 calls (WYNN1221A105) *updated*
Chart of WYNN: