As noted in last week’s blog, as January goes, so usually goes the rest of the year. US markets are up for the year to date, reflecting renewed optimism in a rebound for the economy. Following this past week’s negative returns, particularly evidenced in the last 10 minutes of Friday’s trading, the TSX Composite is now in negative territory. However, I strongly presume that Canadian Large Cap Stocks will follow the US direction.
As recommended in last week’s blog, I personally bought on weakness Potash (POT) on Friday @ $160.85 and sold a little later and a few minutes before closing at $163.70. Moments later the stock closes at $159.77 ! That would indicate the strength of the late selloff. Many other market leaders closed at their daily or weekly lows usually indicating a weak opening Monday AM. This however could offer opportunities to pick up great stocks at lower prices.
This past week moves of interest include: After hitting a new 52 week high, Agrium (AGU) closed down for the week 6.13% and 8.55% below the new high. Potash (POT) also broke a new high yet closed the week down 6.89%. In a related sector, Viterra (VT) hit a new high and closed up 10.09%. Soft commodities are still therefore hot and this should lead one to believe that opportunities exist also in the late falling fertilizer sector. Certain energy stocks are also showing strong forward momentum including: Encana (ECA), Nexen (NXY) & Talisman (TLM) all three making strong gains for the week. Lastly note the weakening of some great financial stocks including: Bank of Montreal (BMO), Scotia (BNS), CIBC (CM), National Bank (NA) & Toronto Dominion (TD). CIBC (CM) lost 3.82% for the week. Research in Motion (RIM) closed at a weekly low losing 5.434% overall.
Growth Recommendations Going Forward: BUY ON WEAKNESS (!). Keep a close eye for an entry point on Agrium (AGU), Potash (POT) Teck Resources (TCK.B), Canadian Natural Resources (CNQ), Talisman (TLM), & Research in Motion (RIM).
Income Recommendations: BCE, Telus (T), Bank of Montreal (BMO), CIBC (CM), Royal (RY) & TD.
Income with Immediate Growth Potential: Baytex (BTE), Bonavista (BNP), Crescent Point (CPG), Pengrowth (PGF). A good week to make money.
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