Stockscom Report for Sunday Apr 11 2004

Publisher: Colin Alexander Editor: Ken Wilson

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

• Markets reaching resistance points

Market Synopsis

Leading into the holiday weekend, markets appeared to have lost traction after Monday’s strong performance, the continuation of the previous week’s bullish rally. The good news announced by Yahoo on Wednesday evening pushed the markets to strong opening gains on Thursday but there was no support for this buying spree. A bullish trend needs fresh money to stay the course and currently there is anecdotal evidence that many institutions have reduced buying, begun selling and are willing to patiently wait for prices to reach more attractive (read: lower) levels before participating once more. Let’s not forget that it takes much buying to move the markets higher but it only takes an absence of buying to trigger lower prices. While Yahoo was able to conserve its gain from Thursday, many others were not and the consequential selling pushed all futures contracts into the red by the end of the day.

Looking at the charts we see that we are approaching an area of strong resistance. On the S&P 500, a reasonable barometer for the entire market, current peaks are located only a few points below those reached in Jan/02 and are also finding resistance in the 40-month moving average turning down just above. Remarkably, the congestion at this level on the monthly chart is identical to the period around Jan/02 when that rally failed as well. Certainly with the fact that we are now a little over a year into the current bull rally, it makes sense that a significant decline should occur.

The Nasdaq Composite chart has a similar character though its peaks were reached in June/01, six months earlier than the S&P. Its current reading lies just below those highs reached then and the 40-month moving average is also just above providing further resistance.

New Buy Recommendations:

iVillage (IVIL) – this stock gapped higher on Thursday and remained higher as it clearly was tracking Yahoo. IVIL is similar to YHOO as an internet portal though they deploy different strategies. One advantage that IVIL’s stock has over YHOO is that it is comparatively much cheaper and most indications point to continued profits, which it attained in its latest quarterly reporting.

New Short Sales

None.

Stock Positions to Sell/Exit:

None.

Portfolio Comments:

BGO – we sold this on Thursday and purchased Golden Star Resources as a strong substitute.

WHT – we continue to watch this and it’s evidently not as strong as it once was. IAG has faltered these past few sessions and there needs to be recovery in that if WHT is to rise.

WMT – we applied a stop to Wal-Mart given the unusually steep losses on Wed and Thu of the past week. While WMT has indicated that the current quarter’s performance is stronger than first forecasted, the stock price of this retailer is dropping much as the broad group of retailers is, on the threat of reduced sales due to the collective public attention diverted to the problems experienced by American troops in Iraq.

New stops have been added to the list while others have been modified. Those that have blanks, are being carried unstopped for now. Please see our complete list of stops in the table below.

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	Stop	Action Rating
08/25/03	Bema Gold	BGO #	3.08	3.33		SOLD 04.08.04
12/08/03	BHP	BHP	17.18	18.95	17.25	H
01/12/04	Beta Oil and Gas	BETA	3.25	2.90		SOLD 04.06.04
03/01/04	Consol Energy	CNX	27.50	28.15		H
04/08/04	Golden Star Res.	GSS #	6.88			B
01/12/04	Sierra Wireless	SWIR #	21.95	42.38	33.00	H
03/01/04	Suncor	SU #	26.25	26.31		H
03/08/04	Transcanada Corp	TRP #	21.34	21.70		H
23/02/04	Wal-Mart	WMT	59.44	56.69	56.00	H
11/03/03	Wheaton River	WHT #	2.36	3.22		H

New stops in BOLD

* Stop on a closing basis

** Buy if above entry price