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Publisher: Colin Alexander Editor: Ken Wilson (450-691-4617)
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Technically Speaking
The three principle large cap indexes continue to perform strongly with Nasdaq once more leading the parade and the Dow Jones Industrials once more pulling up the rear in a relatively weak performance. The small cap stocks as designated by the Russell 2000 and the S&P Midcap 400 have also contributed greatly to the bullish rally that shows no sign of abating.
By the end of the week, energy equities were rebounding firmly despite the drop in the price of crude, which made the rise in the broad indexes all the more surprising. Though energy prices are considered to be critical to the successful functioning of the North American economy, the negative effect of high energy prices is evidently lower than first thought. The current, bullish view of stocks is a result of solid earnings announcements from S&P firms and their positive outlooks, which aren’t about to be negated based on the price of fuel.
In our world of stocks, PHS and TRP are expected to release earnings announcements this week while last week saw ARNA, GILD and ORCT announce their own respective results. Moreover MOGN announced a takeover of a small pharmaceutical firm.
In deciding to purchase another firm, MOGN sustained some modest downward pressure and we are continuing to look carefully at the technical prognosis of this latest move. Similarly, we saw some pressure with GILD and ORCT despite the exceedingly good results and this could simply be cases of buy on the rumor and sell on the story. In the case of GILD, we have chosen to tighten the stop to avoid an unpleasant loss.
New Buy Recommendations:
Precision Drilling (PDS) – As a group the oil service stocks performed very strongly last week and this was expected to happen at some point due naturally to the high prices that energy is fetching currently. When there are high prices, exploration and drilling activity begins to increase at a faster rate than producing wells deliver in a bid to substantially increase reserves. Therefore the rate of utilization of oil equipment is increased significantly and for much longer than the price of oil and gas remains high or near a peak. PDS broke to a new high close for 2005 on Friday and by completing an outside bar on the weekly chart, signaled its intention to begin a new leg higher. On the daily chart, the firm support at $38 this week was confirmation that for now, the floor on PDS would be just that - $38 per share.
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 |
|
|
Arena Pharma |
ARNA |
8.25 |
8.22 |
|
|
|
|
Canadian Nat Res. |
CNQ *** |
28.47 |
40.31 |
|
B |
|
|
Captiva Software |
CPTV |
14.03 |
15.97 |
14.00 |
B |
|
|
|
GILD |
39.58 |
44.47 |
42.00 |
B |
|
|
Humana |
HUM |
36.30 |
38.91 |
36.75 |
B |
|
|
MGI Pharma |
MOGN |
26.91 |
26.08 |
|
|
|
|
Nexen |
NXY |
33.76 |
35.59 |
|
B |
|
|
Novatel |
NGPS |
28.09 |
34.43 |
|
B |
|
|
Orckit Comm. |
ORCT |
27.09 |
26.18 |
|
B |
|
|
Pacificare Health |
PHS |
62.60 |
74.12 |
|
B |
|
|
Sun Hydraulics |
SNHY *** |
23.92 |
29.20 |
|
B |
|
|
Transcanada Corp |
TRP |
21.34 |
27.02 |
23.25 |
B |
New stops in BOLD
* Stop on a closing basis
** Buy if above entry price
*** Split-adjusted price