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.

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).

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.

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”.

Petro-Canada Public Participation Act

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.

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.

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.

The Big Board gets a Bell Curve

Not surprisingly, the NYSE had to change its market capitalization listing rules in the current bear market. With stocks like Citigroup (NYSE:C), General Motors (NYSE:GM) and Ford (NYSE:F) all flirting with a share price level that would trigger delisting - a $1 minimum - the exchange temporarily suspended its minimum rule late last year and lowered the minimum market cap to $15-million last month. Now the lower standard is being floated as a more permanent fix. This is a sign of the time, but surely raises some questions about standards going forward. The Big Board ain't so Big anymore.

Eldorado

It's always telling to see a stock hit a new 52-week high while the rest of the market suffers. Eldorado Gold (TSX:ELD) scaled to $11.60 this morning. The stock was a Stock Trends Pick of the Week on January 9 at $9.25. It turned Stock Trends Bullish a month ago.

Nova's Middle East saviour

Maybe we need a lot more foreign vultures at the table. Abu Dhabi's state owned IPIC has swooped in to offer $6 share for downtrodden Nova Chemicals Corp. (TSX:NCX, NYSE:NCX). Trading in NCX was notably slim last week as the stock stabilized after several weeks of heavy trading and gruesome losses. This offer was likely very swift in the making.

Tech relative strength

Most investors are running for cover. The question they should ask, though: what cover? most of our trend signals point toward precious metals - and for good reason. But technology stocks are also garnering a stalwart reputation in the market downdraft. The Nasdaq 100 index has outperformed the S&P 500 over the last three months by 12%. The Powershares Nasdaq 100 ETF (NASDAQ:QQQQ) is currently Stock Trends Bearish, but its relative strength has been on an upward trend since November. Investors should feel reasonably comfortable weighting some of their holdings in tech.

Out with the plastic, in with the cheese

First it was doughnuts, now it's cheese - Canada's blue chip club is slowly becoming a food emporium instead of an industrial complex. Replacing the beleaguered plastics and chemicals firm Nova Chemicals Corp (TSX:NCX) in the S&P/TSX 60 Index is Canada's largest cheese maker, Saputo Inc. (TSX:SAP). SAP now joins Tim Horton's (TSX:THI) as the latest consumer stock added to the blue chip index. Oh, I may be forgetting about the addition of T-shirt maker Gildan Activewear (TSX:GIL), but the message remains the same: Canada's economy is exceedingly lightweight when it comes to the consumer sector. The TSX will remain the domain of the resource and financial sectors.

A healthy advance

Bright spots on the TSX are few and far between, but the performance of SXC Health Solutions (TSX:SXC) is notable one. It reached an new 52-week high today, climbing to $25.40 in the morning session. SXC has been Stock Trends Bullish since June of last year, but made its significant move in November. The 13-week moving average trend line offered support last week, giving investors reason to stick with this bullish trend. Today's move rewards the trend traders.

Investors coming out of hibernation

Relative market stability is starting to bring back anxious investors. January was the first month since August to have net inflows into Canadian mutual funds. Much of that went to fixed income funds, but stocks also benefited from this gradual renewal. This is another sign of hope.

Mega Brands scores

Mega Brands (TSX:MB) spiked 182% today after its deal with Microsoft was announced. Mega Brands will be producing construction toy sets for the Halo Wars video game franchise. Trading in the stock had been unusually light in recent weeks, so this deal was kept under wraps. Still, MB remains in a bearish trend and has more to prove before it deserves Stock Trends attention.