Stockscom Report for
Publisher: Colin Alexander Editor: Ken Wilson (450-691-4617)
Subscriptions and Administration: Pierre Fichaud (toll-free:
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Weakness in the first week
after summer
Technically Speaking
The first full week of September, a holiday-shortened event, witnessed a small increase in trading volumes as investors slowly returned to work. Though Tuesday’s significant rise in tech share prices appeared to enforce the current direction, the abrupt drop in the middle of the week on heavy volumes managed to set aside any thoughts that the markets would continue to accelerate higher. Friday’s mild recovery on weaker volume did little to resolve the near-term direction for stocks.
Progressively we should see an increase in volumes however given the propensity of September to be a relatively weak month for positive returns in stock markets, we expect volumes to increase gradually with many investors unwilling to put new money to work. Moreover, this being a September in the second year of the Presidential Cycle should keep investors edgy as we face both the prospect of midterm elections and the often-bearish month of October.
In the very immediate future, traders will
likely proceed with much caution. In the first half of the week trade balance
figures could cause temporary moves in the markets but Friday’s key industrial
production and
If the Fed chooses to pause on interest rates, we should see a continuation in the equities rally and the double bottom carved out from the months of June and July will likely stand into October but a decision to raise rates will surely be met be renewed selling. Nevertheless, an autumn low should present a much more reliable point from which a rally could take place and until that occurs or some concrete resolution in the market’s direction becomes apparent, we prefer to remain extremely cautious.
New Buy Recommendations (in order of preference):
None.
New Short Sales
None.
Stock Positions to Sell/Exit:
US Steel (X) – We were exited this past week from our short position in X.
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 |
|
|
Brush Engineered |
BW |
26.36 |
26.24 |
24.00 |
B
|
|
|
Nu Horizons Elect. |
NUHC |
13.20 |
13.02 |
12.00 |
B
|
|
|
Seabridge Gold |
SA |
12.11 |
13.50 |
12.00 |
B
|
|
|
US Global Invest |
GROW |
27.32 |
30.83 |
27.32 |
B
|
Short Sales:
|
Date of Entry |
Name |
Symbol |
Entry Price |
Current Price |
Stop |
Action Rating |
|
08/21/06 |
Caterpillar |
CAT |
68.25 |
67.32 |
74.00 |
S
|
|
07/10/06 |
Getty Images Inc |
GYI |
57.60 |
45.40 |
46.50 |
S
|
|
08/13/06 |
US Steel Corp |
X |
57.08 |
62.00 |
62.00 |
Covered |
New stops in BOLD
* Stop on a closing basis
** Buy if above entry price
*** Split-adjusted price