New Watch List Entries
INTC - Intel Corp.
UNH - UnitedHealth Group
Active Watch List Candidates
ADM - Archer-Daniel-Midland Co.
MCD - McDonald's Corp
MSI - Motorola Solutions
Dropped Watch List Entries
AKAM & CIEN graduated to the play list. V and YUM were removed.
New Watch List Candidates:
Intel Corp. - INTC - close: 26.69
This big cap tech stock (semiconductors) has produced an impressive rally off its 2011 lows. The stock broke out to multi-year highs in January. Now the rally has stalled. We want to be ready to take advantage of a dip if the market produces one.
I am suggesting we buy call LEAPS on a dip at $24.50. The $24.00-23.00 zone should offer strong support. We'll use a stop loss at $21.90. Our long-term target is $32.50.
Buy-the-Dip trigger: $24.50 (stop loss 21.90)
BUY the 2013 Jan $25 call (INTC1319a25)
- or -
BUY the 2014 Jan $30 call (INTC1418a30)
Chart of INTC:
Originally listed on the Watch List: 02/11/12
UnitedHealth Group - UNH - close: 53.32
We are expecting a market pull back but there is no guarantee we're going to see one. Currently UNH is ignoring any slow down in the stock market. Shares were rebounding last week and look poised to breakout from its recent consolidation. This healthcare stock has major resistance near the $54.00 level. I am suggesting we open bullish positions if UNH can close over $54.25. We'll use a stop loss at $49.45. Our long-term target is $63.00.
FYI: The Point & Figure chart is bullish with a $62 target.
Breakout trigger: Wait for close over $54.25, stop 49.45
BUY the 2013 Jan $60 call (UNH1319A60)
- or -
Chart of UNH:
Originally listed on the Watch List: 02/11/12
Active Watch List Candidates:
Archer-Daniels-Midland Company - ADM - close: 30.57
ADM made significant progress last week. Shares rallied to $31.09 intraday on Thursday before trimming its gains. ADM does look like it's ready to break higher. It just needs the market to cooperate. I am adjusting our entry point to wait for a close over $31.25 instead of a close over $31.00.
We want to open small bullish positions. We'll use a stop loss at $28.40. Our long-term target is $37.75.
Wait for ADM to close over $31.25 and then buy calls the next day with a stop loss at $28.40.
BUY the 2013 JAN $35 CALL (ADM1319A35)
02/11/12 adjust entry trigger to wait for close over $31.25
FYI: 2014 calls are also available.
Originally listed on the Watch List: 01/28/12
McDonald's Corp. - MCD - close: 99.47
It was a bit of a rocky week for MCD. The stock appears to have set a new lower high but traders continue to buy dips near the rising 50-dma. I suspect that if MCD does break technical support at its simple 50-dma it will drop toward the simple 100-dma, currently near $95.00.
I am leaving our buy-the-dip trigger at $95.50.
Our long-term target is $108.00.
Buy-the-Dip trigger: $95.50, stop 89.50
BUY the 2013 Jan $100 call (MCD1319A100)
12/24/11 adjusted entry point to $95.50, stop loss to $89.50
12/17/11 adjusted entry point to $91.50, stop loss to $87.25
11/26/11 adjusted stop loss to $86.45
Originally listed on the Watch List: 11/05/11
Motorola Solutions, Inc. - MSI - close: 47.40
MSI also made progress this past week. Shares rallied toward major resistance near the $48.00 level. If the market cooperates MSI could see a bullish breakout soon.
Currently our plan is to open bullish positions when MSI closes over $48.25 with a stop loss at $43.95.
Our long-term target is $64.50. FYI: 2014 calls are also available.
Wait for MSI to close over $48.25, buy calls the next day, stop 43.95
BUY the 2013 Jan $55 call (MSI1319A55)
02/04/12 if triggered, use a stop loss at $43.95
01/28/12 MSI underperformed as investors sold the stock following its earnings report. If MSI doesn't improve this week we'll drop it as a candidate.
Originally listed on the Watch List: 12/10/11
Visa, Inc. - V - close: 113.90
Shares of Visa soared following its earnings report on February 8th. While the trend is bullish we don't want to chase it. Visa looks overbought and extended here. I am removing it from our watch list but I'd keep it on your radar. A pull back toward the 50-dma or 100-dma might be a bullish entry point (although I would be surprised if we saw Visa breakdown under the $100 level again).
Our trade never opened.
Our buy-the-dip entry was never hit.
02/11/12 Removed Visa from the watch list.
02/04/12 adjusted buy-the-dip trigger to $97.00, stop 92.00
01/21/12 adjusted buy-the-dip trigger down to $95.50, stop 89.40
01/07/12 Adjusted entry point strategy to buy a dip at $96.00 with a stop at $89.75.
Originally listed on the Watch List: 12/24/11
Yum! Brands, Inc. - YUM - close: 64.74
YUM's earnings report last week pushed the stock to new highs but it wasn't anything out of the ordinary. Shares just continue to drift higher. You could definitely argue that momentum has stalled.
We have been waiting for a pull back in YUM for a long time. It hasn't happened yet. While I suspect it could happen soon after what has been essentially an eleven week rally there is no guarantee YUM will pull back. I am removing YUM from our watch list but I would keep it on your radar screen. A dip near $60 or the 50-dma might prove to be an entry point.
Our buy-the-dip strategy was never triggered.
02/11/12 Removed YUM from the watch list.
02/04/12 adjusted buy-the-dip trigger to $58.50
01/14/12 adjusted entry point strategy to use a trigger at $57.50 and a stop at $53.75
Originally listed on the Watch List: 01/07/12