Tuesday, March 31, 2009

Riding FAS Bull popular

The hot potato in this market is the Direxion Financial Bull 3X ETF (NYSE:FAS). Last week it logged 1.788-million transactions, while weekly trading volume was 1.6-billion shares. Investors want to be bullish about the financial sector, and are willing to roll the dice - leveraged for winning big.  The extreme volatility of this beast goes without saying, but the potential for a big move in FAS must be enticing for quite a few traders. Another 303-million shares traded today as FAS advanced to close at $5.50.

Spare change

A current Stock Trends Pick of the Week selection is Coinstar Inc. (NASDAQ:CSTR). The stock’s secondary (13-week moving average) trend line has been trending positively since mid-December, advancing from the $16 level to its high today at $33 in solid fashion. It has been Weak Bearish since January 16, and has been in the Stock Trends sights since. If the current recession drags on expect CSTR to continue its run as hard-hit consumers dig deeper in their couches for lost change. It’s all good for Coinstar and its self-service coin-counting machines.

RuggedCom sends a message

Another notable stock on the TSX making new 52-week highs is RuggedCom Inc. (TSX:RCM).  This communications networking provider has been trending nicely, opening at a high of $26.89 this morning before tapering off to $25. The stock was a Stock Trends Pick of the Week on January 30 at $17.74.

Sunday, March 29, 2009

China internet

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Big cap tech stocks have been among the better performers year-to-date. The Nasdaq 100 Index is in positive territory with a 5.6% gain over the last three months, thanks in good part to last week’s respectable move. However, the secondary trend line (13-week moving average) remains flat and uninspiring.

A more compelling industry segment of the tech sector, though, is internet infrastructure. Exchange traded funds weighted in this area are moving. The HOLDRs Internet Infrastructure Fund (NYSE:IIH) and HOLDRs Broadband Fund (NYSE:BDH) are examples of ETFs investors can trade. Alternatively, trading AsiaInfo Holdings (NASDAQ:ASIA) would be a more aggressive China play on internet infrastructure. The stock has broken out in the past month and now trades at $17.17, up considerably from its March low of $11.03 after a 25% lift last week. ASIA is a Stock Trends Bullish Crossover, and a worthy trade in this space.

Saturday, March 28, 2009

Semiconductors conducting

Tech stocks have delivered for investors in the recent rally (if we can call it that). Notable in this group are semiconductor stocks. The Philadelphia Semiconductor Index (SOXX) has outperformed the S&P 500 by 27% year-to-date. Comparatively, the broader sector index – the S&P Technology Index – has outpaced the S&P 500 by 15%. Among the better achieving exchange traded funds (ETF) in this space are the Proshares Ultra Semiconductor Fund (NYSE:USD) and the SPDR Semiconductor Fund (NYSE:XSD) and the iShares N.A. Semiconductor Fund (NYSE:IGW) – all besting the broad market by over 30% YTD. Lagging the performance of these ETFs is the HOLDRs Semiconductor Fund (NYSE:SMH) and the Powershares Dynamic Semiconductor Fund (NYSE:PSI). Investors can compare the trend and momentum of these exchange traded funds in the weekly Stock Trends Online listings.

Smith & Wesson gun play

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When the economy goes south and the government gets big the people know its time to hunker down. And they load up for bear. Not surprisingly, a stock like Smith & Wesson (NASDAQ:SWHC) is a big winner. It is up 170% in 2009. Indeed, from its low of $1.53 at the end of October (not coincidentally on the eve of Barrack Obama’s electoral victory) SWHC now finds its way to last week’s high of $6.89. Trading in the stock was especially robust in recent weeks. The stock has been a Stock Trends Pick of the Week selection and is a Bullish Crossover Prediction.

Thursday, March 26, 2009

Pharma meds working

Pharma stocks are finding traction in the current market. Some are hitting 52-week highs, including Immunogen Inc. (NASDAQ:IMGN). The stock advanced to $7.19 this morning before dropping back to $7. IMGN was a Stock Trends Pick of the Week selection February 6 after its breakout to $5.06. Another pharma stock hitting a high today is SXC Health Solutions (NASDAQ:SXCI). It was a Stock Trends Bullish Crossover on January 9 at $17.50 as its secondary trend line started to improve. The stock hit $22 in early trading this morning. Meanwhile, Myriad Genetics (NASDAQ:MYGN) also hit a new high ($46.74) today, a day in which the stock was split 2:1.  The stock has been Stock Trends Bullish since its Bullish Crossover last summer. It was a Stock Trends Pick at $26.44 (post-split).

Wednesday, March 25, 2009

Aurizon horizon

Gold stocks making some headway today.  Among those hitting a new 52-week high on the TSX is Aurizon Mines (TSX:ARZ). It tapped above $6 today. ARZ is among a number of gold stocks that were highlighted in January and early February as Stock Trends Picks of the Week. It first hit our buy signals at $4.33 on January 23. It is also a new member of the S&P/TSX Composite Index effective March 23.

Monday, March 23, 2009

Promising Osisko

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Osisko Mining (TSX:OSK) continued last week’s press through resistance to make a new 52-week high today, the stock’s first day trading as a member of the S&P/TSX Composite Index. OSK is a current Stock Trends TSX Portfolio holding. It closed at $5.61 today, off from the afternoon high of $5.74.

Thinking about nationalizing?

Yesterday’s news that Suncor Energy Inc. (TSX:SU) will merge with Petro-Canada (TSX:PCA) to create a $43.3-billion integrated energy giant brings Canada closer to the final chapter of the country’s unseemly dalliance with energy socialism. Petro-Canada’s origin dates back to the oil crisis of the 1970s and Pierre Trudeau’s nationalistic energy policy. The hands of government still remain on the enterprise, as the Petro-Canada Public Participation Act still regulates the control of Petro-Canada.

Given the considerable challenges the energy business must overcome, this merger reflects the expanded need for rationalization and integration to finance and produce energy resources like the oil sands. Suncor has picked an opportune time to buy PCA, and investors can expect more oil patch M&A activity. However, as a reminder of how invasive and controlling the hands of government are on nationalized enterprise free-market participants would do well to view the contents of the act that governs Petro-Canada. This is the language of control, this is the language of socialism. Beware “the Minister”.

Sunday, March 22, 2009

Alcoa spark

The surge in commodity stocks last week following the Fed’s move to monetize U.S. Treasury debt was pronounced. Gold and silver stocks were the big winners, but industrial commodities also lit up. Alcoa (NYSE:AA) advanced 14% on unusually high volume of trading. Over 1.1 million transactions last week turned over 552-million shares. The stock remains Stock Trends Bearish, but the level of trading in AA was a positive signal for a breakout from the prevailing baseline.

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Commodity markets take the helm

Investors can expect renewed pressure on U.S. dollar assets as the U.S. administration monetizes its growing debt.  A primary driver of emerging and commodity markets is the growth trajectory of the global economy. Has globalization been derailed by the financial crisis? Will it recover soon? The uncertainty surrounding the ability of the global economy to unhinge from the troubled fiscal and monetary predicament burdening the United States recovery is acute. Although deflation remains a primary immediate concern, the seeds for re-inflation are planted. Expect capital flows to reflect the dismal prospect for the U.S. dollar. Investors should keep an eye on performing international markets. Currently, commodity markets like Norway, Chile, Brazil, Canada and Australia are ascending. The Stock Trends ranking of Relative Strength for international markets helps sort the winners and losers.




Biovail fails

Biovail (TSX:BVF) pressed above the key $15 resistance level last week but failed to hold, dropping 5% on Friday to close at $13.84. The stock drew our attention in January when it was a Bullish Crossover. But last week's failed move signals an exit from this trade.

Saturday, March 21, 2009

Financial mustard seeds

Up among the swelling gold stocks on the TSX is National Bank of Canada (TSX:NA). The stock has out-performed the S&P/TSX Composite Index by 43% over the past 13-weeks - an impressive standard amid the crippled financial sector. The big Canadian banks lag NA's bouyancy, but investors can consider this a mustard seed for the sector. Include in that hopeful spin the improved trend picture of TMX Group (TSX:X) and Canaccord Capital (TSX:CCI).

Silver slipper

As the market turns increasingly to commodities and precious metals investors can look for some leverage in silver. The price of silver has risen 23% since the beginning of the year, closing Friday at $13.65. Silver stocks have enjoyed an even better ride. Silver Wheaton (TSX:SLW) is up almost 50% in the past three months thanks to a big pop last week. The stock is one of several precious metal stocks on this week's Stock Trends Picks of the Week.

Wednesday, March 11, 2009

Bearish sentiment will not easily dissipate

Don't be suckered into another bear rally yet. Hungry bottom feeders have got a lot of buying ahead to make yesterday's move sustainable. The foundation is far too weak to put all your marbles down. No need to look further than the Stock Trends distribution of trending stocks: it remains highly bearish. Stick with the winning sectors: precious metals, long bonds, and technology. Investors eager to call this a bottom for financial stocks are brave risk-takers.