Stockscom Report for Sunday Apr 2 2006

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

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

· Nasdaq bounces back

Technically Speaking

The Federal Reserve’s decision to raise interest rates by a quarter point on Tuesday was hardly unexpected, however the emphasis made on continued rate increases was a shock to equity bulls. The Fed Chairman, Ben Bernanke, deliberately drew attention to inflation data and expressed a willingness to maintain interest rate hikes as long as inflation threatened sustainable economic growth. And surprisingly he included commodity price inflation in his definition of core inflation that required careful scrutiny. Unlike ex-Fed Chairman Alan Greenspan, Bernanke evidently considers the threat of sharply higher energy prices to be a serious impediment to containing inflation, risking the overall economic growth of the US.

Equities fell markedly on Tuesday as a result of the afternoon press release from the Federal Reserve and left all the major stock indexes with very bearish-looking outside down days on their respective daily charts. Traders sold stocks on the basis that interest-bearing instruments would benefit from a rising interest rate environment in which investors could lock in significant gains.

But on Wednesday, in a complete reversal from the previous day’s bearishness, traders re-entered long positions and the substantial increase in volume underlined this bullish activity. The Nasdaq-dominated tech sector was the principle recipient of the bullish wave of buying though the Dow Jones and the S&P 500 did also manage gains for the day. But it was the Nasdaq Composite, which reached a new 2006 high even while the Nasdaq-100 tagged along in a subdued state, that played a starring role.

For the rest of the week, the tech sector led the way higher while the broader markets, DJ and SP, continued to retrace their previous gains resulting in weekly losses stemmed only by moving average support lines on their respective charts. Now these indexes appear to be bottoming and rebounding stochastics charts support this hypothesis.

For the tech sector, the small drop on Friday on lower volume does nothing to negate the primary direction, which has now been changed to up. In just the past two weeks, we have expressed caution with tech stock investments but the new 2006 high for the Composite allows us to loosen that cautious maneuvering. The Nasdaq-100 still lags the Composite index however the momentum already evident should be sufficient to elevate the index, comprising the largest tech companies, to new 2006 heights.

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	93.40		B
03/27/06	Anadigics	ANAD	6.85	7.90		B
11/14/05	Birch Mtn Resour.	BMD	6.65	7.38		B
02/21/06	Cdn Natural Res	CNQ	58.00	55.39		H
03/20/06	LSI Logic	LSI	11.25	11.56		B
01/30/06	Nasdaq Stock Mkt	NDAQ	45.98	40.04		H
01/09/06	Nuvelo Inc.	NUVO	12.95	17.82		B
01/09/06	Progenics Pharma	PGNX	29.70	26.49		H
11/07/05	Redback Networks	RBAK	11.78	21.69	18.00	B
03/20/06	RTI Int’l Metals	RTI	47.70	54.85		B
01/09/06	Seabridge Gold	SA	9.49	8.90	8.00	H**
01/09/06	Sierra Wireless	SWIR	13.60	11.68		H
02/27/06	Stereotaxis	STXS	13.57	12.61		H
03/27/06	Texas Industries	TXI	64.55	60.49	57.00	H
11/14/05	Tom Online	TOMO	20.66	25.44		B+
03/08/04	Transcanada Corp	TRP	21.34	28.93	28.00	B

New stops in BOLD

* Stop on a closing basis

** Buy if above entry price

*** Split-adjusted price