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

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Technically Speaking

All major market indices finished the week lower, however, in what is becoming quite a common occurrence, a dichotomy has emerged between the broader markets and the tech sector. Percent losses on the Dow Jones Industrials and the S&P 500 were much greater for the week than on either the Nasdaq Composite or the Nasdaq-100. Moreover, the broader market’s charts indicate that this weakness has been prevalent for the past few weeks.

A quick comparison of their respective daily charts with channels drawn from the March lows, shows the broader markets currently touching down to the bottoms of their respective upwardly-trending channels while the Nasdaq twins, a reliable proxy for the tech sector, remain suspended around the midpoint of their respective channels. It is these channels that we consider most important for a breakdown at this point by the broader markets would likely influence the character of the lagging tech sector and signal an end to the two month rally.

Stochastics on the daily charts are supportive of a rebound in prices with broader markets exhibiting an oversold condition suggesting that a turn is imminent at this point. The tech sector’s stochastics are not as optimistic, however they are located in neutral territory allowing for a change in direction.

All of the indices’ weekly charts indicate overbought conditions are present, which in itself contributes significant downward pressure on prices. Nevertheless for powerfully trending markets, overbought or oversold stochastics on weekly charts often persist for extended periods of time.

Perhaps the most notable factor applicable to recent sessions is the resistance displayed by the 200-day moving average, which has repelled all of the indices with the exception of the Nasdaq-100 and in this particular case, the ND-100 finds itself a mere sliver above the average. Whether or not this key average can continue to resist will go a long way in determining the length of this current rally.

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.

New stops in BOLD

* Stop on a closing basis

** Buy if above entry price

*** Split-adjusted price