Saturday, April 29, 2006

Exxon not that big in market's eye

For all the uproar from the ever corporate-bashing segment of the American leftist interest groups you would think Exxon was delivering more to the owners of this stock than it has lately. Yes, record profits continue for the company amid high crude oil prices and domestic refining bottlenecks...but investors holding XOM could hardly be making "outrageous" returns on Exxon in the first quarter of 2006. Indeed, the stock is basically performing on par with the S&P 500. The Stock Trends 13-week Relative Strength Indicator for XOM is 101. Big corporate profits are not enough sometimes. The scale may be there, but the market thinks XOM's potential is not atmospheric.

Wednesday, April 19, 2006

Corriente blasts past $7

Corriente Resources (TSX:CTQ) is a familiar stock to Stock Trends followers. It had its Bullish Crossover back in September 2005 and was a Stock Trends TSX Portfolio buy at $3.49. Although the CTQ holding was stopped-out at $4.92 in early March, the stock has remained bullish since. The last two weeks have been especially good as CTQ has rallied aggressively - the new listing on the AMEX has improved the company's visibility with U.S. investors. Today's 10 % gain pushes the stock into new rarefied territory. CTQ closed at $7.25.

Tuesday, April 18, 2006

Rite Aid

Consumer stocks are strong in a number of segments, and movement in pharmacy retailer Rite Aid (NYSE:RAD) is indicative of investor interest. RAD was particularly active last week, with 48.7-million shares trading in over 31,500 trades. The stocks current rally began in earnest in early March, with its move to $4. Trading at $4.30 today, this Stock Trends Weak Bearish stock is on our radar. It has been on the NYSE Picks of the Week report for the past two weeks.

Wednesday, April 12, 2006

Party like it's 1999

Maybe it was all too famously premature back at the turn of the millennium. Perhaps investors were giddy with the calendar as much as the emerging technologies that promised so much. The Internet bubble lives in ignominy, but six years later that promise if coming to steady fruition. Soon enough a world of content will be coming through the pipes and consumers are hungry for the culture and interaction being served up on the Internet. Disney's (NYSE:DS) announcement about Internet content delivery is part of a major shift in the way consumers will access their favourite programs. To borrow from the anthem of Prince, Internet stocks are "going to party like its 1999" all over again.
Evidence of the heated trading activity is found in the Internet Infrastructure HOLDRS (AMEX:IIH). Over the past month IIH has advanced aggressively on high volume. It ranks highly with a Stock Trends RSI of 121, and has made 52-week highs in each of the last four weeks. Last week IIH traded over 1500 times - far more than its usual level and twice as much as the previous week. Investors want a piece of the action and IIH is attracting those that want to play the industry. IIH was a Stock Trends Bullish Crossover at the end of December when it traded at $3.86. The issue trades at the $5 level now.

Monday, April 10, 2006

U.S. long-term rates recovering

The dire prospect of an inverted yield curve presaging a coming recession is a market concern. So a correction on the long end of the curve is a promising sign for stock market bulls. The easy money period has come to a close. The Fed's steady rise in the discount rate has helped correct a distorted debt market over the last few years, and it is time yields moved back to more normal levels.

Although the stock market has yet to come to terms with this, the movement of long-term rates is growth-positive. Currently, the 10-year Treasury Yield Index leads the U.S. indexes for market performance over the first quarter of 2006. Its Stock Trends RSI is 112, ahead of the Dow Jones Transports and the Russel 2000 - at 110 and 107 respectively. Notably, the price momentum of the 10-year Treasury Index is above the Short-term Interest Rate Index, confirming the correction away from the inverted yield curve scenario. Not surprisingly, interest rate sensitive utility stocks are suffering, as Dow Jones Utility Index ranks at the bottom of the U.S. Stock Trends RSI ranking. See:

Wednesday, April 05, 2006

China on my mind

No question: China is still hot with investors. The safe route for many is to buy country ETFs, and many are making their play on China's economic ascendancy by buying PowerShares Golden Dragon USX China E.T.F. (AMEX: PGJ). Last week 2.1-million shares traded as the ETF powered to a 52-week high. PGJ has kept up the bullish price move this week and is gaining more ground. The current price is $16.87.

Institutions feelin' good about the TSX

A good measure of the growing institutional interest in the iUnits S&P/TSX 60 Index exchange-traded-fund (TEX:XIU) is the weekly average traded value Stock Trends calculates. Last week was an especially important week as trading volume for XIU was exceptionally high - Relative Volume hit 11% and over $929-million of shares traded. Much of this activity was institutional. Average traded value of XIU last week approached $350,000 - much higher than its normal level. Today's activity takes XIU ever closer to $70, spurred on by general bullishness about the resource-heavy TSX. Investors - big and small - are betting that XIU has plenty of leg left in its bullish trend.

Tuesday, April 04, 2006

Domtar blossoms

Although today was a bit of a downer, several forestry stocks are pulling out of their winter blues. Most fetching is Tembec (TSX:TBC) and Domtar (TSX:DTC). Both stocks are currently rallying out of long-term bearish trends and have been highlighted as Stock Trends Weak Bearish stocks for several weeks. Domtar outperformed the S&P/TSX Composite by 11% in the first quarter, but much of the gains have come in the last month. Today's weakness may be a good opportunity to pick up DTC, as the stock fell with the market.