Stockscom Report for Sunday Nov 26 2006

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

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

·        Holiday hangover to begin?

Technically Speaking

Despite persistent strength in the market indexes, namely the three large cap indexes, we should be prepared for some near-term weakness as the strong move upward in the past several weeks has continued unabated. The tech-heavy Nasdaq market is especially vulnerable given that the latest stochastics demonstrate that these stocks are unequivocally overbought and in dire need of some retracement in order to relieve the mounting pressure. One should expect that a drop to the confluence of the 25-day moving average and previous tops at around 2375 on the Composite index or 1750 on the Nasdaq-100 is a likely avenue.

With respect to the broader large cap indexes such as the Dow Jones and the S&P 500, similar gravitational pulls could entail moves to 12,100 on DJ and 1375 on the S&P in order to re-test some of these known support levels. Stochastics are not transmitting messages as extreme as in the case of the Nasdaq market however they remain a good early warning signal to be cautious.

What could trigger this decline? There is a substantial amount of economic data to be released this week beginning with durable goods orders and consumer confidence on Tuesday and the breakdown in the US dollar on Wednesday and Friday of this past week has traders potentially considering exiting certain US markets concerned with the drop in value of their investments.

New Buy Recommendations (in order of preference):

Actions Semiconductor (ACTS) – This fabless semiconductor based in China is a cheap profit-making enterprise and, technically, the breakout this week makes it a buy. After a four-month long congestion and bottoming period, it started a move that carried it above this level and signaled its intention to test higher levels including a probable test of its all-time high.

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.

New stops in BOLD

* Stop on a closing basis

** Buy if above entry price

*** Split-adjusted price