Full episode: Market Call for Wednesday, August 8, 2018
Jeff Parent, chief investment officer at Castlemoore Inc.
Focus: Technical analysis
Earnings volatility is abating. Not all earnings were positive, but the indexes continue to push towards their tops. A profit-taking pullback is a possibility here. Short-term support needs to be held or this may develop into a double top reversal with significant downside. This support is at 16,050 on the TSX and 2,780 on the S&P500. With Canada’s overweight exposure to natural resources, we may see hesitation to move higher as many of larger caps in this area are struggling (materials) or stalling (energies). In the U.S., techs are disproportionately in the headlines, but many large cap names are doing quite well, like pharma and global banks, and present many opportunities.
NFI GROUP (NFI.TO)
NFI had a very nice pullback into $47 with lots of support. It confirmed a short-term bottom as it rose above $50. Earnings just announced were positive. Sell below $48.
SEVEN GENERATIONS (VII.TO)
Very nice double bottom at $14. Good relative performance in the industry. Momentum is positive after the earnings last week and could bring the price up to $18.50. Seven Generations is a good way to diversify portfolios that are underweight energies. Could pull back to $16. Sell below $14.50.
BIG LOTS (BIG.N)
After a strong earnings related pullback in March, Big Lots found a well-defined bottom and is breaking out. Begin selling below $44. Target is $53.
PAST PICKS: MARCH 13, 2018
HCP INC (HCP.N)
A very nice bottom has formed from March and the continuation into the $26 level is encouraging. We may see a stall here as the price is now near the resistance level of $27. Still pays a good dividend. It could rise to $30 by year-end. Sell below $24.25.
- Then: $23.00
- Now: $26.10
- Return: 14%
- Total return: 17%
Rayonier came within 30 cents of the $40 price target. Would be a “hold” or “sell” now as the price dropped off and earning didn’t help.
- Then: $35.49
- Now: $34.11
- Return: -4%
- Total return: -3%
CANADA GOOSE HOLDINGS (GOOS.TO)
Canada Goose is a very nice stock from a chart pattern perspective. The breakout above $47 was clear and actionable, and the pop to the $70s was a nice bonus. From here, it looks challenging. The lofty price and lack of forward price momentum may bring in the profit takers. This must hold above $70.
- Then: $43.17
- Now: $72.58
- Return: 68%
- Total return: 68%
Total return average: 27%