Some of the stocks on my radar screen are KO, PEP, MCD, and UN. You'll notice they're all more defensive in nature. KO's breakout past $66 and its recent consolidation looks very bullish. PEP could be a buy if shares breakout past resistance in the $68.00-68.50 zone. Depending on your risk tolerance MCD could be a buy right now, although I see some little resistance near $77.75-78.00. The strength in UN is very bullish but the stock is now overbought and nearing resistance at $33.00. Overall, while these stocks look like they have potential I am reluctant to add new positions as we move into a very heavy two weeks of earnings season.
As investors react to earnings news we may end up seeing some entry points as stocks sell-off back toward support. Let's be patient and see what happens.
New Watch List Entries
None, no new watch list candidates
Active Watch List Candidates
BA - Boeing Co.
HSY - Hershey Co.
T - AT&T Inc.
Dropped Watch List Entries
JRCC and PBR hit our triggers and jumped to the play list.
Active Watch List Candidates:
Boeing Co. - BA - close: 72.60
04/16 update: Two weeks ago it was nothing but bad news for BA with headline stories about stress fractures turning into rips and holes in some of their 737 planes. Yet for all the bearish calls for the stock, shares haven't moved that much. Traders bought the dip on Thursday near the 50% retracement of its late March bounce (March lows to the recent highs). I remain cautious on the stock but BA still offers opportunity.
We will keep our trigger to open positions at $76.50 but we only want to open very small bullish positions to limit our risk.
We'll use a stop loss at $69.75. Our long-term targets are $89 and $104.
FYI: BA is due to report earnings on April 27th.
Breakout trigger: $76.50 <--- Small Positions Only!
BUY the 2012 Jan. $80 call (BA1221A80)
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BUY the 2013 Jan. $90 call (BA1319A90)
Originally listed on the Watch List: 03/26/11
Hershey Co. - HSY - close: 57.30
You have probably heard of "buyer's remorse". Well now I'm having a different type of buyer's remorse. I wish we had bought HSY a few weeks ago! Investors bought the dip near $52.00, where prior resistance turns into support, and it's been a slow and steady grind higher ever since. I suspect that HSY could see some profit taking after the Easter holiday.
I am adjusting our buy-the-dip entry point from $52.25 to $53.00 and we'll move our stop loss to $49.45. HSY could see profit taking as investors react to its earnings report. HSY is due to report earnings on April 26th.
Our long-term targets are $60 and $64.
Buy-the-Dip trigger: $53.00 <-- updated trigger
BUY the 2012 $55 calls (HSY1221A55)
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BUY the 2013 $55 calls (HSY1319A55)
Originally listed on the Watch List: 04/02/11
AT&T - T - close: 30.65
04/16 update: Nothing has changed for AT&T. The stock is still consolidating sideways in the $30-31 zone. The company is due to report earnings on April 20th. I suspect that T will see some profit taking on the earnings results and that's when shares might hit our buy-the-dip trigger at $29.25. More conservative traders may just want to take a step back and wait for the dust to clear and re-evaluate AT&T a week from now after any post-earnings volatility.
If we are triggered at $29.25 we'll use a stop at $26.95.
Our long-term target is the $36-40 zone.
Buy-the-Dip trigger: $29.25
BUY the 2012 January $30.00 call (T1221A30) current ask $2.07
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BUY the 2013 January $30.00 call (T1319A30) current ask $2.70
Originally listed on the Watch List: 04/09/11