Our LEAPStrader watch list has been very successful these last few weeks. This past week saw HD, OA, and PEP graduate to the active play list. K met our entry requirement on Friday and will be an active trade come Monday morning.
After a huge (+10%) four-week surge in the major averages I am suggesting a little bit of caution. Stocks should see a pullback sooner rather than later. A little patience on launching new trades will probably be healthy.
Tonight I am adding TSN as a new watch list candidate. I am also providing a small list of stocks on my radar screen. Some of these have earnings coming up soon. Others need to see a correction before I would consider them to be potential LEAPStrader candidates.
Keep an eye on:
AKAM, CTXS, ATVI, STZ, MA, ALK, SNE, GD
New Watch List Entries
TSN - Tyson Foods Inc.
Active Watch List Candidates
AAPL - Apple Inc.
Dropped Watch List Entries
HD, K, OA, and PEP all
graduated to our active play list.
New Watch List Candidates:
Tyson Foods, Inc. - TSN - close $47.44
TSN's beef business has struggled as a prolonged drought has hurt the cattle business. Yet TSN is seeing strong improvement in their chicken and prepared foods businesses.
TSN is in the consumer goods sector. According to the company,
"Tyson Foods, Inc. (TSN), with headquarters in Springdale, Arkansas, is one of the world's largest food companies with leading brands such as Tyson®, Jimmy Dean®, Hillshire Farm ®, Sara Lee®, Ball Park®, Wright®, Aidells® and State Fair®. It's a recognized market leader in chicken, beef and pork as well as prepared foods, including bacon, breakfast sausage, turkey, lunchmeat, hot dogs, pizza crusts and toppings, tortillas and desserts. The company supplies retail and foodservice customers throughout the United States and approximately 130 countries.
Tyson Foods was founded in 1935 by John W. Tyson, whose family has continued to lead the business with his son, Don Tyson, guiding the company for many years and grandson, John H. Tyson, serving as the current chairman of the board of directors. The company currently has approximately 113,000 Team Members employed at more than 400 facilities and offices in the United States and around the world. Through its Core Values, Code of Conduct and Team Member Bill of Rights, Tyson Foods strives to operate with integrity and trust and is committed to creating value for its shareholders, customers and Team Members. The company also strives to be faith-friendly, provide a safe work environment and serve as stewards of the animals, land and environment entrusted to it."
After big gains in 2013 the stock ran out of steam. Shares have been consolidating sideways for more than a year and a half. That's probably because the earnings picture has been cloudy. The company has struggled to meet estimates and management has guided lower in recent quarters. That changed recently in September when TSN raised their 2016 guidance. The company should see +9% earnings growth in 2015 but earnings are expected to grow +21% in 2016.
Technically the bullish breakout in TSN this month is significant. The $44-45 zone has been major resistance for months. The current rally has generated a bullish buy signal on the point & figure chart, which is now forecasting at $63.00 target.
Tonight I am suggesting a little patience. Wait for a pullback in TSN. We are listing a buy-the-dip trigger to launch bullish positions at $45.50.
FYI: TSN is scheduled to report earnings on November 23rd.
Buy-the-dip Trigger @ $45.50,
Start with a stop loss at $41.35
BUY the 2017 JAN $50 call (TSN170120C50) current ask $4.70
Option Format: symbol-year-month-day-call-strike
Chart of TSN:
Originally listed on the Watch List: 10/25/15
Active Watch List Candidates:
Apple Inc - AAPL - close: 119.08
Big cap technology names were leading the market higher last week. AAPL finally started to participate in the market rally. Shares rallied past their September highs but AAPL still has resistance in the $120 area.
The week ahead should be volatile for AAPL. The company reports earnings on Tuesday night (October 27th). That means Wednesday morning could be exciting. I expect AAPL to really surge one way or the other.
Right now we have a buy-the-dip trigger to buy calls if AAPL trades down to $101.00. If shares rally higher instead we will re-evaluate our entry point strategy next weekend.
Trade Description: September 13, 2015:
Love it or hate it AAPL always has Wall Street's attention. It has a cult-like following. The company's success has turned AAPL's stock into the biggest big cap in the U.S. markets with a current valuation of more than $651 billion.
The company is involved in multiple industries from hardware, software, and media but it's best known for its consumer electronics. The iPod helped perpetuate the digital music revolution. The iPhone, according to AAPL, is the best smartphone in the world. The iPad helped bring the tablet PC to the mass market. The company makes waves in every industry they touch with a very distinctive brand (iOS, iWork, iLife, iMessage, iCloud, iTunes, etc.) and they've done an amazing job at building an Apple-branded ecosystem. Now they're getting into the electronic payments business with Apple Pay.
Earnings growth has been significant as consumer snapped up the iPhone 6 and 6+. The company expects the iPhone to be a major driver as only 20-25% of their user base has upgraded. This past week AAPL held their annual event in September and introduced several upgrades.
AAPL has unveiled new stuff for their smartwatch, they introduced the iPhone 6s and 6s+, they introduced a new, larger iPad that's being called the iPad Pro. The company also introduced a new Apple TV system. They also unveiled a new leasing program for their iPhones.
Normally consumers buy iPhones through their wireless carrier. This past week AAPL announced a deal where consumers could lease their phone from Apple for $32.00 a month and get a free upgrade every year. For the iPhone fanatics it's probably a great deal.
The 2015 holiday shopping season will be here sooner than you expect and AAPL stands to benefit from their parade of new products announced last week. Yet I don't want to buy AAPL at current levels. Odds are good that stocks could sell-off following the FOMC decision this coming Thursday. We want to take advantage of any temporary weakness in shares of AAPL.
Tonight I am listing a buy-the-dip trigger at $101.00. No initial stop loss but investors might want to consider a stop under the August 24th low ($92.00).
Buy-the-dip trigger at $101.00
No stop, initially
BUY the 2017 Jan $120 call (AAPL170120C120)
Option Format: symbol-year-month-day-call-strike
Originally listed on the Watch List: 09/13/15