I am making some changes to the play updates and watch list format. The biggest change is less charts for updates and returning candidates. The goal is to add more stocks and more candidates to the newsletter.
I have updated almost all of our buy-the-dip triggers in the watch list tonight.
New Watch List Entries
LLL - L-3 Communications
SBUX - Starbucks Corp.
Active Watch List Candidates
AAPL - Apple Inc.
BVN - Compania de Minas Buenaventura
CERN - Cerner Corp
DE - Deere & Co
F - Ford Motor Co.
GS - Goldman Sachs
HD - Home Depot
NKE - Nike Inc.
NOK - Nokia Corp
NYX - NYSE Euronext
WLL - Whiting Petroleum
WYNN - Wynn Resorts Ltd.
Dropped Watch List Entries
New Watch List Candidates:
L-3 Communications - LLL - close: 73.90
It looks like the trend is changing for LLL. After a terrible performance in 2010 shares appear to have found a bottom. Now LLL has a new trend of higher lows and higher highs. Granted it could be a big bear-flag pattern but given the market's bullish posture I suspect LLL is ready to begin a new leg higher. You could argue that a Republican controlled congress is bullish for defense stocks.
I am suggesting we buy call LEAPS on a dip at $72.00. We'll use a stop loss at $67.90. Our first target is $79.50. Our second target is $89.00.
Headquartered in New York City, L-3 Communications employs approximately 67,000 people worldwide and is a prime contractor in C3ISR (Command, Control, Communications, Intelligence, Surveillance and Reconnaissance) systems, aircraft modernization and maintenance, and government services. L-3 is also a leading provider of a broad range of electronic systems used on military and commercial platforms. The company reported 2009 sales of $15.6 billion
(source: company press release or website)
Buy-the-Dip trigger: $72.00
BUY the 2012 January $75 calls (symbol: LLL1221A75)
Chart of LLL:
Starbucks Corp. - SBUX - close: 30.87
SBUX served up some steaming hot earnings last week. Wall Street was expecting a profit of 32 cents with revenues of $2.77 billion. SBUX beat estimates with a profit of 37 cents on revenues of $2.84 billion. Same-store sales soared +8%, which was better than the +5.5% expectation. Management has offered an optimistic outlook and SBUX plans to open another 500 stores in fiscal year 2011.
Essentially SBUX is a play on the consumer. If jobs are improving and consumer spending is improving, then SBUX is set to keep the rally going. We don't want to buy new highs. Broken resistance near $28 should be support so I'm suggesting a trigger to buy calls on a dip at $28.50. We'll use a stop loss at $25.90. Our long-term target is $34.75 and $38.75.
Since 1971, Starbucks Corporation has been committed to ethically sourcing and roasting the highest quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. In addition to its Starbucks retail stores, the company produces a wide range of branded consumer products globally, including ready-to-drink beverages, packaged coffees and premium ice creams. The companyâ€™s brand portfolio features Starbucks Coffee, Tazo Tea, Seattleâ€™s Best Coffee and Torrefazione Italia Coffee, enabling Starbucks to appeal to a broad consumer base
(source: company press release or website)
Buy-the-Dip trigger: $28.50
BUY the 2012 January $30.00 calls (symbol: SBUX1221A30)
Chart of SBUX:
Active Watch List Candidates:
Apple Inc. - AAPL - close: 317.17
It seems unlikely that given this market's bullishness that AAPL will ever see $280 any time soon. I am adjusting our trigger to launch bullish positions on a dip to the rising 50-dma (currently at $287). We will round up and set our trigger (this week) at $290.00. We'll move the stop loss, if triggered, to $279.00. Our first long-term target is $345.
Buy-the-Dip trigger: $290.00
BUY the 2012 January $300 calls (1221A300)
- or -
BUY the 2013 January $320 calls (1319A320)
Compania de Minas Buenaventura - BVN - close: 54.20
BVN continues to tag new highs as resource and commodity names rally on dollar weakness. This stock will correct eventually. I am moving our trigger to open bullish positions to $48.00 and moving our stop loss to $41.00. I would keep your position small (half normal size or less) given our aggressive entry point.
Buy-the-Dip trigger: $48.00 (half a position)
BUY the 2011 JUNE $50 calls (BVN1119F50) <-- new strike.
Deere & Co - DE - close: 79.10
Another week, another gain for DE. I am suggesting we use the 50-dma to open positions. Currently the 50-dma is at $72.40. We'll round up to $73.50 as our trigger point to buy call LEAPS. Keep your position small (at least half normal size) given our aggressive entry point. Our new stop is $69.00.
Buy-the-Dip trigger: $73.50 (only half a position)
BUY the 2012 January $80.00 calls (DE1221A80)
Ford Moto Co. - F - close: 16.21
Shares of Ford have exploded higher hitting new six-year highs on strong auto sales. I certainly regret not buying the stock near $13.00 a few weeks ago. Broken resistance near $14.25 should be new support. I'm suggesting a trigger to buy the stock or call LEAPS at $14.30. We'll move our stop loss to $12.95.
Buy-the-Dip trigger: $14.30
BUY the stock - or -
BUY the 2012 January $15.00 calls (F1221A15)
Goldman Sachs - GS - close: 171.07
GS managed to gain $10 on the strength in financials. The stock is very short-term overbought and we don't want to chase it. However, odds of GS dipping to $152 any time soon are low. I am raising our trigger to buy call LEAPS to $160.25. We'll move our stop loss to $152.25. I would keep your position small (at least half your normal size) given our more aggressive entry point.
Buy-the-Dip trigger: $160.25
BUY the 2011 April $180 calls (GS1116D180)
- or -
BUY the 2012 January $190 calls (GS1221A190)
Home Depot - HD - close: 31.92
HD has been consolidating under resistance near $32.00 for about six weeks now. Nimble, more aggressive traders may want to consider launching positions on a dip near $31.00. I am suggesting we wait for a close over $32.50. When HD does close above this level we'll buy the open the next day. New stop at $29.90.
Wait for HD to close over $32.50, then launch positions.
BUY the 2012 Jan $35.00 calls (HD1221A35)
Nike Inc. - NKE - close: 84.11
As much as I want to see NKE correct back toward support near $75 I don't think it's going to happen. After consolidating sideways for most of October NKE is breaking out higher again. I am adjusting our strategy. We want to buy call LEAPS at $82.00. However, we want to keep our positions very small given this aggressive entry and we'll move our stop loss to $79.50.
Buy-the-Dip trigger: $82.00
BUY the 2012 Jan $100 calls (NKE1221A100)
Nokia Corp. - NOK - close: 10.77
I'm not willing to give up just yet on buying a dip in NOK. We will adjust our entry point from $10.00 to $10.25 near the 50-dma. We'll move the stop loss to $9.65.
Buy-the-Dip trigger: $10.25
BUY the 2012 January $10.00 calls (NOK1221A10)
NYSE Euronext - NYX - close: 30.79
We've seen several stocks run away from us as we wait for a dip. I don't want that to happen to us with NYX. This stock has spent the last five months consolidating sideways under resistance at $31.00. Now shares are poised to breakout above this level. Let's use a trigger at $31.50 to buy call LEAPS. I'm moving the stop loss to $28.40.
Buy-the-Breakout Trigger: 31.50
BUY the 2012 January $35.00 calls (NYX1221A35)
Stericycle - SRCL - close: 72.39
I am removing SRCL from the watch list but readers may want to keep an eye on it just in case the stock ever bounces from support near $67.00.
Whiting Petroleum Corp. - WLL - close: 106.47
The $106-110 zone should be significant resistance for WLL so there is a chance shares will see a correction soon. I am adjusting our trigger higher. We'll follow the 50-dma (currently at 97.20). I'm moving the trigger to buy calls to $100 and we'll move our stop loss to $94.00.
Buy-the-Dip trigger: $100.00
BUY the 2011 March $100 calls (WLL1119C100)
- or -
BUY the 2012 January $110 calls (WLL1221A110)
Wynn Resorts - WYNN - close: 113.07
WYNN is now up five weeks in a row and looking pretty overbought at current levels. We still don't want to chase it but we will adjust the trigger higher. I'm now suggesting an entry point to buy calls at $101. We'll use a stop loss at $94.00. This has turned into an aggressive trade so keep your positions small (half normal size).
Buy-the-Dip trigger: $101.00 (small positions!)
BUY the 2011 MAR $110 calls (WYNN1119C110)
- or -
BUY the 2012 Jan $120 calls (WYNN1221A120)