Stockscom
Report for
Publisher: Colin Alexander Editor: Ken Wilson (450-691-4617)
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Technically Speaking
There was little change to the broad direction of the markets this week with the major trend remaining up. More intermediate moves have fluctuated between upward and downward trends often depending on the stochastics at the given moment. Nevertheless markets are situated at a junction point for now assuming that the SP offers the proper, valid description of stocks in general.
Despite the on-going presence of a potential head and shoulders formation stretching back to the fall of 2004, this remains inconclusive as long as SP is supported above 1150 and finds resistance above 1220. If we were to witness a close on the daily chart at a price significantly above 1230, we would be forced to abandon ideas of such a H+S formation as the new high would negate it. This potential is within grasp considering that we’ve seen successive higher highs and higher lows since the latter half of April. Likewise a drop to a price level below 1150 would appear to be a sell signal to technicians and consequently would trigger further selling that would cause the H+S formation to be completed.
On a more micro scale, the week’s price action gave the bulls a ray of hope. Mon’s intraday low remained the low for the week and subsequent sessions saw either daily gains and/or successful tests of the low.
The tech-heavy Nasdaq
continues to follow an alternative drumbeat. The rebound off the
April bottom was particularly strong but strength has been declining for the past
month and there are signs that money is being pulled from this market to be
redeployed in other bullish areas, namely the small and medium cap stocks.
While price has yet to show significant deterioration, there are indications
that a slide of some significance could take hold. Most notably with the ND is
the overhead resistance near 2100, which has capped price several times and
prevented a technical buy signal. When stocks refuse to go any higher (or
further in either direction), the most likely future direction is downward.
New Buy Recommendations:
Nexen (NXY) – Nexen is the former Canadian Occidental, an independent oil and gas firm from a few years ago. The chart has been strong with the upward swing in oil prices however it experienced several months of chart retracement after a significant climb at the beginning of the year. Fri’s large move coupled with the big increase in trading volume and a break-out pattern on the chart leads us to believe that this stock is once again poised for sharp gains.
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.
Please take note that the following clause
is being removed under the assumption that the aforementioned federal budget in
[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 |
|
|
Aleris International |
ARS |
22.65 |
22.29 |
|
H |
|
|
Canadian Nat Res. |
CNQ *** |
28.47 |
38.37 |
|
B+ |
|
|
Captiva Software |
CPTV |
14.03 |
14.17 |
13.00 |
H |
|
|
|
GILD |
39.58 |
44.13 |
39.50 |
H |
|
|
Humana |
HUM |
36.30 |
39.35 |
36.75 |
H |
|
|
Novatel |
NGPS |
28.09 |
27.10 |
|
H |
|
|
Orckit Comm. |
ORCT |
27.09 |
26.52 |
|
H |
|
|
Pacificare Health |
PHS |
62.60 |
72.52 |
|
B |
|
|
Sun Hydraulics |
SNHY |
35.88 |
37.04 |
|
B |
|
|
Transcanada Corp |
TRP |
21.34 |
26.67 |
23.25 |
B |
|
|
Verisign Inc |
VRSN |
29.24 |
30.47 |
29.50 |
SOLD |
New stops in BOLD
* Stop on a closing basis
** Buy if above entry price
*** Split-adjusted price