Stockscom Report for Sunday Feb 23 2003

Publisher: Colin Alexander     Editor: Ken Wilson

Subscriptions and Administration: Pierre Fichaud (toll-free: 866-487-9711)

 

 

(We’re running a much shorter Stockscom this week due to an oversupply of ice and an undersupply of electricity)

 

Market Synopsis

 

The rally that began with short-covering before the President’s Day holiday continued this week but war clouds overhang this market and although Friday’s action completed a Lindahl buy signal on the daily, we see no reason to change our opinion that upward movements would be restrained at the very least. The fact is, war with Iraq dominates all other news items on most days and economic news is consequently pushed into the background.

 

The latest economic indicators only serve to muddle the situation further unwilling to reveal too much and offering instead a mixed picture with the likes of producer inflation reaching new highs while consumer inflation remains low and record new home sales juxtaposed with a slump in retail sales. While the media blames the war for failings of the market, the Business Council of Chief Executives has said that capital spending plans for most companies does not hinge on the vagaries of war. Perhaps more important was the revelation that capital spending would likely be flat this year, thus giving a strong indication that no one should expect spectacular GNP growth this year.

 

Looking at the charts, we can offer little hope for those expecting a return to the heady bull market days of years past. The indexes continue to fail at resistance levels thus assuring that the bear market remains in control. The Dow Jones has the potential to reach 8250 but would probably fail at or before this level given the amount of chart-resistance. At that level, the Dow would have to contend with both a 40-day moving average and the November and December lows. The same situation exists for the S&P around the 870 level. The Nasdaq, which has outperformed the other two indexes this year, differs only in the sense that the December low has already been breached, but it too hits resistance around 1410 due to an intermediate downward moving channel boundary begun by connecting the December and January highs.

 

 

New Buy Recommendations:

 

None.

 

New Short Sales

None.

 

Stock Positions to Sell/Exit:

 

None.

 

List of Current Stock Recommendations:

Action Ratings. The following is the legend for designating immediate action
for our stock recommendations. The first is B, meaning the stock is timely
to buy but the case for doing so right here is not overwhelming. Either the
stock may have gotten ahead of itself and may be vulnerable to a retracement or
else the stock has been performing disappointingly but may simply be
regrouping. B+ and B++ indicate stocks for which there is a technical case
to buy now, with plusses adding weight according to how many there are, up
to a maximum of two. Stocks rated H are ones to hold, awaiting confirmation
to buy more or to sell. SELL, of course, means what it says. It seldom pays
to override this designation. In the case of stocks held short, the rating is S where positions should be retained. S+ and S++ indicate stocks for which there is a technical case to add to the positions with plusses adding weight similar to long positions. The maximum number of plus signs is 2.

Stocks marked # are eligible as Canadian content in Canadian RSP funds. Otherwise there is a 30 percent restriction on foreign stocks held in these accounts.

Date of Entry	Name	Symbol	Entry Price	Current Price	Action Rating
12/16/02	Glamis Gold	GLG #	10.40	11.75	H
12/16/02	Gold Fields	GFI	14.68	12.50	H
12/16/02	Goldcorp	GG #	12.75	11.60	H
12/16/02	Harmony Gold	HMY	16.98	14.61	H