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Publisher: Colin Alexander Editor: Ken Wilson (450-691-4617)
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Technically Speaking
The week’s action did nothing to resolve the question of whether we are watching a significant reversal in the direction of stock indexes or whether this is a very healthy retracement of stock prices in need of a rest.
On the Nasdaq Composite, the uptrend line from April 29 is still in command despite some tightness with the current price. A move lower would put the uptrend line in doubt while a move higher would strengthen support along the boundary and indicate a continuation of the bullish rally begun this spring.
Similarly, the S&P also held the same respective support line (beginning on Apr 29) and moreover, its broader support line found by connecting the peaks from Dec/04, Mar/05, and Jun/05 that lay in the vicinity of 1219 is providing additional firm support. Again this is key that the market remains firm in light of the selling pressure at this point if the bullish rally is to continue. Failure at this level would mean a more substantial downturn in both markets is likely.
One additional aspect working in favor of the retracement concept is the drop in trading volumes as the markets’ prices compress at these support lines. Nasdaq in particular has seen a very supportive drop in selling volumes over the eight sessions.
As mentioned last week, we are fighting seasonality with a return to a bullish stance here as the late summer/early autumn season is traditionally a time for lows in the equities markets before rallying at the end of the year.
New Buy Recommendations:
Although we were stopped out of our oil and gas shares (CNQ and NXY), we are not in a hurry to get back in. Certainly there is the potential that our exit was premature however we’d prefer to see a few more days data before making any decision.
Autodesk (ADSK) – Autodesk released their quarterly results on Thursday after the close of trading and their strong performance resulted in the announcement of an almost doubling of net income y-o-y with a very substantial increase of 33% in revenues. On the chart, the result was a significant gap higher on triple the normal volume breaking above the peaks occurring in Dec/04 and Jun/05 and leading to a new all-time high. On both the weekly and monthly charts, there are Lindahl buy signals, which lend solid support to the buy recommendation.
New Short Sales
None.
Stock Positions to Sell/Exit:
Stocks exited this week are list below.
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 |
|
|
Am Sci & Eng Inc |
ASEI |
49.25 |
56.78 |
|
B
|
|
|
Canadian Nat Res. |
CNQ *** |
28.47 |
42.00 |
42.00 |
SOLD |
|
|
Captiva Software |
CPTV |
14.03 |
20.11 |
17.00 |
B |
|
|
Humana |
HUM |
36.30 |
46.12 |
40.00 |
B |
|
|
MGI Pharma |
MOGN |
26.91 |
25.25 |
25.25 |
SOLD |
|
|
Nexen |
NXY |
33.76 |
38.80 |
38.80 |
SOLD |
|
|
Nvidia |
NVDA |
30.05 |
29.20 |
|
B
|
|
|
Pacificare Health |
PHS |
62.60 |
75.33 |
73.00 |
B |
|
|
Precision Drilling |
PDS |
41.50 |
43.78 |
41.00 |
B |
|
|
Transcanada Corp |
TRP |
21.34 |
26.47 |
25.10 |
B |
|
|
Websidestory |
WSSI |
16.74 |
16.80 |
|
B+ |
New stops in BOLD
* Stop on a closing basis
** Buy if above entry price
*** Split-adjusted price