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Stockscom Report for Sunday Dec 26 2004
Publisher: Colin Alexander Editor: Ken Wilson
Subscriptions and Administration: Pierre Fichaud (toll-free: 866-487-9711)
Market Synopsis
The US dollar that we’ve been following intensely these past few weeks evolved into a clear identifiable flag pattern and as flags do, they eventually resolve themselves in the direction of the initial thrust. Thursday’s market action saw a new break on the euro currency, which reached over 1.35 before retreating a bit below. Tonight in overnight markets, the euro is trading several points higher and signaling its intention to begin a new leg higher.
This is interesting action worth noting for it usually coincides with parallel moves in the prices of precious metals. Tonight in overnight markets, gold is trading over $3 higher. But more importantly, it is a clear indication that market players have no interest in attempting to be long the dollar, that whatever caused the dollar to have a resurgence was related to end-of-year positioning and that traders, the greatest market force, are willing to trade for currencies other than the dollar and pay premiums. The weight of a policy of benign neglect toward the dollar is being felt tonight, not in Washington however, but in Tokyo and Brussels.
Surprisingly, the 30-year bond displays little of the tension surrounding the dollar. Despite only a tenuous grip on the dollar preventing it from further losses, the bond remains somewhat aloof supported largely by investors who must either believe that inflation is not increasing or, in fact, deflation remains the true threat.
Technically Speaking
Technically the stock charts remain in bullish rally mode and with the Dow Jones hitting a new high for 2004 this week, there is renewed optimism for the bulls seeing the three large cap indexes all in the area of their peaks for the year.
We are approaching the new year and January with some trepidation as this represents the end of the strongest three month period of the year. Between the large drop in housing construction in November, the expectation of slower GDP growth in 2005 and a leveling off of profit growth, there is ample reason to be cautious moving forward. Still the charts demonstrate little of this concern and are uniformly bullish and this optimism extends to the Russell small caps and the SP midcap indexes as well.
New Buy Recommendations:
None.
New Short Sales
None.
Stock Positions to Sell/Exit:
None.
Portfolio Comments:
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 |
|
08/23/04 |
AES |
AES |
10.23 |
13.27 |
9.50 |
B |
|
12/20/04 |
Avaya |
AV |
17.73 |
17.42 |
|
H |
|
11/08/04 |
Cryptologic |
CRYP # |
18.58 |
23.27 |
|
B+ |
|
12/13/04 |
Electronic Arts |
ERTS |
55.77 |
62.46 |
|
B |
|
11/19/04 |
Essex Corp |
KEYW |
17.69 |
17.85 |
|
H |
|
11/08/04 |
F5 Networks |
FFIV |
42.38 |
47.01 |
|
B |
|
11/08/04 |
Ipsco |
IPS # |
31.69 |
44.63 |
|
B+ |
|
11/08/04 |
MFRI Inc |
MFRI |
7.41 |
8.75 |
|
B |
|
08/09/04 |
Pan Amer Silver |
PAAS # |
13.40 |
16.23 |
15.00 |
H |
|
09/27/04 |
Petro-Canada |
PCZ # |
50.90 |
49.43 |
|
H |
|
11/05/04 |
Placer Dome |
PDG # |
22.12 |
18.74 |
18.00 |
H |
|
11/08/04 |
Potash Corp |
POT # |
73.85 |
82.38 |
|
B |
|
08/16/04 |
Suncor |
SU # |
28.50 |
34.50 |
|
B+ |
|
03/08/04 |
Transcanada Corp |
TRP # |
21.34 |
24.24 |
22.00 |
B |
|
09/20/04 |
Ulticom |
ULCM |
13.24 |
16.50 |
14.95 |
SOLD |
|
09/20/04 |
Vintage Petroleum |
VPI |
18.44 |
23.09 |
|
B |
New stops in BOLD
* Stop on a closing basis
** Buy if above entry price