Stockscom Report for Monday Jan 2 2006

Publisher: Colin Alexander        Editor: Ken Wilson (450-691-4617)

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

 

 

 

 

 

Technically Speaking

 

The bullish stock rally begun in October has faltered and is exhibiting clear signs of fatigue. For now the immediate trend has turned negative for all indexes and while stochastics have reached oversold levels, a retracement here is unlikely to yield significant gains nor a modification to this trend. For now we expect a continuation of the general deterioration in the charts with Nasdaq leading the parade. Friday’s trading to end the year was particularly ominous for both the S&P and Dow Jones as their respective closes generated new lows for the month of December.

 

We consider that the key price level to watch for support on the Nasdaq Composite is the open gap from early November near the 2150 level. But, we would not be surprised to see support below the 200-day moving average (near 2100) much like the lows of April and October followed by a new rally.

 

With the drop on Friday both the DJ and SP are well within striking distance of support near the 10700 on DJ and 1240 on SP. These levels would represent the first levels of support though we believe they are quite dubious. There is a far greater likelihood that a test of 10400 on DJ and 1200 on SP would occur as price continues to swing lower.

 

New Buy Recommendations (in order of preference):

 

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.

N.B. There are no longer restrictions on foreign stocks held in Canadian retirement savings accounts.

 

 

Date of Entry

Name

Symbol

Entry Price

Current Price

Stop

Action Rating

11/21/05

Amer Sci & Eng

ASEI

71.08

62.37

 
H

11/14/05

Birch Mtn Resour.

BMD

6.65

7.17

 
B

11/21/05

Broadcom

BRCM

48.41

47.00

 
SOLD

11/21/05

Omnivisions Tech

OVTI

16.39

19.50

 
SOLD

11/07/05

Plexus Corp

PLXS

20.15

22.74

 
B

11/07/05

Qualcomm

QCOM

44.83

44.00

44.00
SOLD

12/12/05

Radiant Systems

RADS

13.78

12.16

 
H

11/07/05

Redback Networks

RBAK

11.78

14.06

 
B+

11/21/05

Sigma Designs

SIGM

13.10

15.38

 
B

11/14/05

Tom Online

TOMO

20.66

19.82

 
H

03/08/04

Transcanada Corp

TRP

21.34

31.48

27.50

B

12/05/05

USA Truck Inc

USAK

29.30

29.13

 

H

10/10/05

Viasat Inc

VSAT

27.43

25.50

25.50
SOLD

 

New stops in BOLD

* Stop on a closing basis

** Buy if above entry price

*** Split-adjusted price