Jeff Parent, chief investment officer at Castlemoore Inc.
Focus: Technical analysis

MARKET OUTLOOK

The mini-bear market beginning with the drop on Oct. 10 and 11 may have created some short-term buying opportunities for those that hold cash, like the disciplined investors who placed stops. Many support lines were broken and, based on the steepness of the decline, caused even the long-term investor to reduce their positions. The sell-off looks to be partially due to a valuation readjustment and partially due to emotions. As value investors dig through the rubble, they will add support and help bring prices back to a reasonable level. For the medium and longer terms there’s no substantial buying signal, although that could come quickly. The support on the S&P 500 at 2,627 is now resistance. A move above this level or even the shorter-term moving averages (35 - to 50-day) will be positive. The best comment that can be made today is that the dividend yields are encouraging.

TOP PICKS

FIRST TRUST DJ INTERNET INDEX ETF (FDN.O)

The Internet is not going away and this ETF may be the easiest and safest way to take advantage of a drop in the big names in the space. This is a beta trade, as in it helps to avoid the negative surprises in individual stocks. The expectation in the short term is a move to the $130 level. Exit below $114.

CRESCENT POINT ENERGY (CPG.TO)

Crescent Point is deeply oversold. It’s hard to believe that this was above $40 at one time. Now it’s a bargain and pays a good dividend. This is still risky though as the dividend could be cut and so on. The nice double bottom at $3.80 makes this an exit point. On a reversal-of-fortunes trade, this could make it back to $6 quickly.

ADVANCED MICRO DEVICES (AMD.O)

AMD has sold off, providing a buying opportunity for the Intel competitor. Prices have held firm above $17 after the big October drop. It has low correlation to the index and interesting technology developments which help to diversify a portfolio. It could be back to $30. Sell below $17.

PAST PICKS: MAY 31, 2018

KEYERA (KEY.TO)

As will all the past picks today, the exit levels mentioned on Nov. 5, 2018 were hit. With Keyera, it was at $31.50. Like most stocks now, the current level looks like a short-term buying opportunity. If Keyera can move above $27.70, it looks good. Caution should be urged until it develops some legs.

• Then: $36.35
• Now: $27.04
• Return: -26%
• Total return: -23%

WELLS FARGO (WFC.N)

The $50.50 exit level was breached. Now it needs to move above $48.20 to look interesting, but there are better opportunities in the markets right now.

• Then: $53.99
• Now: $46.57
• Return: -14%
• Total return: -12%

GRAY TELEVISION (GTN.N)

Easily broke below the $16.20 exit. The chart looks uneven and too volatile to be recommended at this point.

• Then: $11.00
• Now: $15.04
• Return: 37%
• Total return: 37%

Total return average: 1%

WEBSITE: castlemoore.com