The ongoing unrest in the Middle East will continue to provide for strong gains in the energy market. However, one should always note that natural gas producers would not necessarily be included in this list owing to abundance of reserves here in North America. Irrespective of cold winters, natural gas prices do not appear to be going anywhere for quite some time (at least in comparison to petroleum). Some big gains in top producers this past week include: Top value pick last week Nexen (NXY) +13.37%, Suncor (SU) +10.01% and both recommended last week Canadian Natural Resources (CNQ) +9.38% and Talisman (TLM) +8.89%. Low level Middle East unrest is always good for oil prices.
Precious metal stocks can also benefit from unstable political times however the rise in the US currency based on improved US economic forecasts can dampen this. Three of five stocks recommended last week increased substantially including: Barrick (ABX) +8.54%, Eldorado (ELD) +6.44% & Iamgold (IMG) +5.84%. Kinross (K) remained flat while top pick Agnico Eagle (AEM) dropped marginally by week’s end after having increased 4.6% by mid week.
Opportunities unfolding: Based on rumours of softening Chinese demand for grains, fertilizer stocks took a hit by week’s end after hitting new 52 week highs earlier. Agrium (AGU) which also announced a fire in one of their American plants dropped 4.46% for the week, while Potash (POT) lost 4.30%. Any rumours of decreases in Chinese demand for natural resources should be viewed as a rumour that should be capitalized upon. The continual influx of citizens moving from rural to urban areas and growth of the middle and wealthier class means that Chinese demand for building materials, energy and food stuffs will not diminish anytime in our lifetime. Teck Resources (TCK.B) has suffered two straight weeks of more than 6% losses and should be watched carefully for an entry point. Often recommended in recent weeks, Research In Motion (RIM) received a strong buy rating and should be purchased on any weakness. Keep an eye on the political situation for buying opportunities.
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