Keith Richards, president and chief portfolio manager, ValueTrend Wealth Management
Focus: Technical analysis
MARKET OUTLOOK
We wrote an update entitled "In we go" at the end of October. In it, we noted our moves out of cash that we had held over the summer and into the securities we saw that were breaking out. We bought various foreign market ETFs and some specific sectors (industrials, banks) in the U.S. We felt it was time to go into these sectors. Charts were breaking out from consolidation patterns in formerly overlooked markets and sectors. Value was catching a bid. So, in we went!
Well, here we are three weeks later. Our move into the above noted markets and sectors was timely. They broke out aggressively to the upside. Despite the fact that we were still holding some cash (about 7 per cent), the Equity Platform and the markets still managed a substantial gain period. Good news, yes. But, there's now a reason for us to be cautious. The ValueTrend Bear-o-meter moved into "cautious" territory in early November. So, we sold a few high-flying stocks and moved back into about 17 per cent cash last week. We’re looking for a minor pullback on the markets over the coming one to two weeks that might afford some entry opportunities. Plus, we are watching gold and silver for a potential entry point in December (which can be a low point for these sectors). We won’t hold that cash for too long.
TOP PICKS
BMO U.S. BANKS (HEDGED) ETF (ZUB:CT)
The U.S. banks broke out from a consolidation pattern and they tend to be seasonally strong until April. This is a currency-hedged way of playing that breakout.
PEMBINA PIPELINE (PPL:CT)
This looks like a $50 stock to us, and you get a 5 per cent dividend while your wait for that potential price target.
NIKE (NKE:UN)
$90 breakout point. Generally retail does OK until the spring from a seasonal perspective.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| ZUB | Y | Y | Y |
| PPL | Y | Y | Y |
| NKE | Y | Y | Y |
PAST PICKS: AUG. 29, 2019
ONEX (ONEX:CT)
- Then: $78.42
- Now: $79.64
- Return: 2%
- Total return: 2%
BMO LOW VOLATILITY CANADIAN EQUITIES ETF (ZLB:CT)
- Then: $34.22
- Now: $34.81
- Return: 2%
- Total return: 2%
CASH
Total return average: 1%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| ONEX | Y | Y | Y |
| ZLB | Y | Y | Y |
WEBSITE: valuetrend.ca
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