Stockscom Report for Sunday Jan 7 2007

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

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

· Questionable start to 2007

Technically Speaking

It is quite difficult to discern from this holiday-and-funeral-shortened week, a clear direction for stocks as we begin a new year. While the first trading day saw a phenomenal increase in volume on all three major indexes (four if one counts the Nasdaq-100 separate from the Composite which should be the case in our opinion), the near flat close gave no indication of investors’ attitudes and furthermore, were we to look at the second day of trading, we would be no more ahead. Incertitude appears to be the over-riding sentiment as we begin 2007.

If we expand our timeframe to weeks, our weekly charts offer some reference points to watch. Since November, the Nasdaq indexes have evolved into sideways patterns with support around 1750 on the ND-100 and 2370 on the Composite index. The sideways movement could continue but were that to happen we would expect that the trading range would widen to a certain degree for it appears too compressed in its current state. Interestingly, taking a wider view using the monthly chart, it shows these same support lines extending back to 2001.

On the Dow Jones Industrials the prime support line remains the previous high reached in 2000 corresponding roughly to the 11900 level. Given the fact that 12000 is a round figure, support may actually be stronger at this point than below however. For the moment, the Dow is garnering sufficient support from the 40-day moving average that other support levels are irrelevant.

There is a similar story with the S&P 500, which follows the DJ to a large degree. Friday’s close though has it touching its 40-day moving average and of particular concern to us is that it has slipped out of its upward moving channel that has guided prices since the July lows. A correction for all indexes is long overdue but this one may be the canary in a coalmine. Were the S&P to drop, we would expect that support at 1330 would limit losses.

New Buy Recommendations (in order of preference):

Barr Laboratories (BRL) – Barr touched down in July at its low for the year but has been steadily bringing itself back since. In all chart timeframes: daily, weekly, and monthly, there are buy signals and with Friday’s close above the previous two months of closing prices, there is strong evidence that Barr is rebounding strongly. The principle resistance currently is the 200-day moving average however this is now within a dollar and likely to fall very quickly. We particularly like the support that the 40-month moving average has provided on the monthly chart.

New Short Sales

None.

Stock Positions to Sell/Exit:

We sold ALY at its stop on Wednesday. GPN jumped higher on Thursday only to retreat massively upon the release of its quarterly results on Friday and in the process, it was exited at the stop.

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
11/06/06	Allis-Chalmers	ALY	17.80	19.50	19.50	SOLD
12/26/06	Cheniere Energy	LNG	29.15	27.29	25.80	H
10/23/06	Coca-Cola Co.	KO	46.75	48.26	47.00	B
09/25/06	Cognos Inc	COGN	35.20	42.71	38.00	B
12/11/06	Credence Systems	CMOS	5.02	4.99	4.50	H
01/03/07	Fronteer Dev’t Grp	FRG	9.53	8.40	7.25	H
10/02/06	Global Payments	GPN	43.80	41.50	41.50	SOLD
11/13/06	Goodyear Tire	GT	18.00	23.28	19.00	B+
10/23/06	I-Flow Corp	IFLO	15.02	15.94	14.50	B
12/11/06	Isis Pharma.	ISIS	12.53	11.32	10.00	H
10/30/06	Millennium Pharm	MLNM	11.58	11.00	10.50	H
11/13/06	NYSE Group	NYX	96.50	102.39	90.00	B++
12/26/06	Qiao Xing U Tele	XING	13.67	12.73	11.85	H
11/06/06	Watts Industries	WTS	41.25	39.39	37.75	H

New stops in BOLD

* Stop on a closing basis

** Buy if above entry price

*** Split-adjusted price