Stockscom Report for Sunday Dec 31 2006

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

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

· Santa Claus rally fizzles quickly

Technically Speaking

Although equities closed the holiday-shortened week higher, there is a visible weakness in their respective charts, which bodes ill going forward into 2007. Certainly it does not help matters that volumes were customarily low given the number of traders and investors who prefer to remain on the sidelines and not participate in these relatively illiquid markets.

Specifically, the broader large capitalization stock indexes, the Dow Jones and the S&P 500, have retained an upward slant despite the progressively challenging environment and it is the tech-heavy Nasdaq along with small and midcap stock indexes, which are laggards. Nevertheless, one of the reasons for the particular weakness in Nasdaq of late has been Apple (AAPL) and it generated a rebound this week after starting it under significant pressure - the result of an investigation into backdating of stock options. Once the new year begins, larger volumes and a greater number of participants will add more reliability to the charts.

There is potential for gold stocks to rebound strongly from the recent weakness if the price of gold continues to rally. A pennant has formed on the gold chart and price need only move above $645 an ounce for the Feb gold futures contract to signal a buying opportunity of the same dimension as the rise in from the end of March to the middle of May. Were this to happen, we would be inclined to recommend Yamana Gold (AUY), which is the best performing gold stock at this time.

New Buy Recommendations (in order of preference):

Fronteer Development Group (FRG) – We made a mistake with the stop on this stock and were exited much too prematurely. The price has been extremely well supported at the 40-day moving average and is evidently considered to be cheap as price is on the move once more. Given that the fundamentals are very supportive for the price of uranium with demand increasing and supplies constrained for several more years, FRG is a good uranium company to own.

New Short Sales

None.

Stock Positions to Sell/Exit:

We sold ACTS at its stop on Friday.

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
11/27/06	Actions Semi	ACTS	9.28	8.20	8.20	SOLD
11/06/06	Allis-Chalmers	ALY	17.80	23.04	19.50	B
12/26/06	Cheniere Energy	LNG	29.15	28.87	25.80	H
10/23/06	Coca-Cola Co.	KO	46.75	48.25	47.00	B
09/25/06	Cognos Inc	COGN	35.20	42.46	38.00	B
12/11/06	Credence Systems	CMOS	5.02	5.20	4.50	B
10/02/06	Global Payments	GPN	43.80	46.30	41.50	B
11/13/06	Goodyear Tire	GT	18.00	20.99	17.00	B
10/23/06	I-Flow Corp	IFLO	15.02	14.95	13.50	H
12/11/06	Isis Pharma.	ISIS	12.53	11.12	10.00	H
10/30/06	Millennium Pharm	MLNM	11.58	10.90	10.50	H
11/13/06	NYSE Group	NYX	96.50	97.20	90.00	B
12/26/06	Qiao Xing U Tele	XING	13.67	13.19	11.85	H
11/06/06	Watts Industries	WTS	41.25	41.11	37.75	H

New stops in BOLD

* Stop on a closing basis

** Buy if above entry price

*** Split-adjusted price