Keith Richards, President and Chief Portfolio Manager, ValueTrend Wealth Management
Focus: Technical analysis
Top Picks: Microsoft, Coca-Cola, Merck
MARKET OUTLOOK:
It’s been a mad, mad world.
Investors in 2026 have been rewarded by holding a concentration in top-performing assets with little diversification.
Focusing on U.S. tech stocks and tech-weighted index plays has been rewarded. This—while punishing normally sensible strategies like sector diversification or hedging.
I have been pounding the table on BNN and through my blogs for months about the lack of breadth (market sector participation) on the U.S. markets. It had to end – or at least take a major pause. In fact, we are witnessing a rotation into other sectors as investors bail out of an overbought sector trade. This is healthy! Finally, we can return to age-old principles of diversification and value-hunting.
For our part, we are holding a mixture of value and low volatility sectors (staples, pipelines...) and some contrarian trades such as energy, gold, and oversold stocks, one to be discussed in my Top Picks.
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TOP PICKS:
Microsoft (MSFT NASDAQ)
We view this as an oversold bounce trade, not a long termed hold. We waited for it to prove a bounce off US$360 support, then bought our first leg.
We have committed two thirds of our allotted capital to this trade so far. Will add one more leg if it keeps going in the right direction. Our sell target is near US$450.
If it breaks that, there’s always the potential for a return to US$550, but we will watch the charts to see if that is realistic.
Coca-Cola (KO NYSE)
The chart broke out. This is a defensive consumer staple – not a high risk name in my opinion. Breakouts be breakouts!
Merck (MRK NYSE)
Another breakout chart. The sector (health care) looks good. There is some rotation going into the group.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| MSFT NASDAQ | Y | Y | Y |
| KO NYSE | Y | Y | Y |
| MRK NYSE | Y | Y | Y |
PAST PICKS: MAY 5, 2026
Peyto (PEY TSX)
Then: $25.83
Now: $24.33
Return: -6%
Total Return: -5%
Mosaic (MOS NYSE)
Then: US$23.26
Now: US$22.70
Return: -2%
Total Return: -1%
George Weston (WN TSX)
Then: $98.29
Now: $101.75
Return: 4%
Total Return: 4%
Total Return Average: 1%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| PEY TSX | Y | Y | Y |
| MOS NYSE | N | N | N |
| WN TSX | Y | Y | Y |
