Our watch list is doing a good job of triggering new positions. We are adding two new candidates tonight.
New Watch List Entries
JAS - Jo-Ann Stores
LCC - US Airways
Active Watch List Candidates
BVN - Compania de Minas Buenaventura
F - Ford Motor Co.
NFX - Newfield Exploration
SBUX - Starbucks Corp.
WLL - Whiting Petroleum
Dropped Watch List Entries
DE and GS graduated to the play list. HD and JCG have been removed.
New Watch List Candidates:
Jo-Ann Stores, Inc. - JAS - close: 46.56
JAS has spent the last seven months consolidating sideways under resistance in the $47.50 area. Now shares look ready to breakout past this level in the next few weeks. Aggressive traders may want to consider bullish positions now. I would rather open positions on a dip and I'm suggesting a trigger at $44.50. Investors should note that JAS is due to report earnings on December 1st, after the closing bell. Wall Street expects a profit of $1.07 a share. JAS has a decent string of beating the earnings estimates so traders are probably expecting another strong quarter. Odds are we could get triggered on any post-earnings reaction. If JAS rallies instead more nimble traders could buy a breakout past $47.50.
If we are triggered at $44.50 I'm suggesting a stop loss at $41.45. The 200-dma should offer some support at $42.00.
FYI: July calls were the longest ones available.
Jo-Ann Fabric and Craft Stores the nation's largest fabric and craft retailer with locations in 48 states, was founded in 1943 as a single retail store. Today, more than 750 Jo-Ann stores across the country provide consumers with creative inspiration (source: company press release or website)
Buy-the-Dip trigger: $44.50
BUY the 2011 July $50 calls (JAS1116G50)
Chart of JAS:
Originally listed on the Watch List: 11/27/10
US Airways Group, Inc. - LCC - close: 11.70
Airlines stocks have been soaring on expectations for an improvement in the economy. I like LCC because shares actually saw a correction in November and don't look so overbought. Yet the long-term trend looks very bullish with the breakout past the $10.50 area. Aggressive traders could go ahead and launch positions now. I am suggesting a buy-the-dip trigger at $11.00. If triggered we'll use a stop loss at $9.49. Our long-term first long-term target is $14.90.
US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,100 flights per day and serves more than 200 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. The airline employs more than 31,000 aviation professionals worldwide and is a member of the Star Alliance network, which offers its customers 21,000 daily flights to 1,160 airports in 181 countries. Together with its US Airways Express partners, the airline serves approximately 80 million passengers each year and operates hubs in Charlotte, N.C., Philadelphia and Phoenix, and a focus city in Washington, D.C. at Ronald Reagan Washington National Airport. US Airways was the only airline included as one of the 50 best companies to work for in the U.S. by LATINA Style magazineâ€™s 50 Report for 2010. For the sixth year in a row, the airline also earned a 100 percent rating on the Human Rights Campaign Corporate Equality index, a leading indicator of companiesâ€™ attitudes and policies toward lesbian, gay, bisexual and transgender employees and customers
(source: company press release or website)
Buy-the-Dip trigger: $11.00
BUY the 2012 January $12.50 calls (LCC1221A12.5)
Chart of LCC:
Originally listed on the Watch List: 11/27/10
Active Watch List Candidates:
Compania de Minas Buenaventura - BVN - close: 53.74
BVN's rally failed near resistance at $56 last week. The stock appears to have produced a bearish double top pattern. I am expecting the correction to pull BVN down into the $48-47 zone. Right now the plan is to buy call LEAPS on a dip at $48.00 but keep your position size small.
Buy-the-Dip trigger: $48.00 (half a position)
BUY the 2011 JUNE $50 calls (BVN1119F50)
Ford Moto Co. - F - close: 16.10
GM's IPO has come and gone and we didn't see quite the sell-off in Ford as I expected. I still don't want to chase it and will keep our trigger to buy the dip at $14.50. If we do get triggered I would start with a small position and slowly build a position over time. If triggered we want to use a stop loss at $12.95.
Buy-the-Dip trigger: $14.50
BUY the stock - or -
BUY the 2012 January $15.00 calls (F1221A15) - or -
BUY the 2012 January $17.50 calls (F1319A17.5)
Home Depot - HD - close: 31.00
I am giving up on HD. The stock has been unable to recover following the Nov. 16th reversal and the big decline in the 17th. Shares have been stuck under their 50 and 200-dma the last few days. We will drop HD as a watch list candidate.
J. Crew Group, Inc. - JCG - close: 43.75
JCG was a new watch list candidate a week ago. Unfortunately, the stock did not hit our trigger to buy calls on Monday. Tuesday morning there was an announcement that JCG was being taken private and shares gapped open near $44 a share. I am dropping it as a candidate.
Newfield Exploration - NFX - close: 66.79
NFX managed to hit new two-year highs intraday last week. I still don't want to chase it here. The energy sector looks like it could correct soon. I'm suggesting a trigger at $61.50.
If triggered I'm listing our stop loss at $55.75. We'll set our first target at $69.00.
Buy-the-Dip trigger: $61.50
BUY the 2011 June $65 calls (NFX1118F65)
- or -
BUY the 2012 January $65 calls (NFX1221A65)
Starbucks Corp. - SBUX - close: 31.14
It sounds like this year's Black Friday was a big one for retailers. I know the parking lots were overflowing in my part of town. That should mean SBUX had a banner weekend. Shares of SBUX displayed some strength with a new relative high. While I'm bullish on this stock I don't want to chase it.
I'm suggesting we stick with the plan and wait for a dip to $28.50.
We'll use a stop loss at $25.90. Our long-term target is $34.75 and $38.75.
Buy-the-Dip trigger: $28.50
BUY the 2012 January $30.00 calls (symbol: SBUX1221A30)
Whiting Petroleum Corp. - WLL - close: 108.75
WLL is another energy stock that has been able to maintain its bullish trend. The stock looks stronger than many of its peers but I still don't want to chase it. Currently the 50-dma has risen to $102. I have listed a trigger to launch bullish positions at $102.50. If triggered use a stop at $95.90.
Buy-the-Dip trigger: $102.50
BUY the 2011 March $100 calls (WLL1119C100)
- or -
BUY the 2012 January $110 calls (WLL1221A110)