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Canadian bank stocks continue to move higher on better than consensus fiscal first quarter earnings and anticipation of other banks beating estimates. Bank of Montreal was the trigger today with earnings of $1.13 versus consensus of $1.03. Two more Canadian bank stocks broke resistance this morning, Commerce Bank and National Bank.
Chart courtesy of StockCharts.com www.stockcharts.com
Chart courtesy of StockCharts.com www.stockcharts.com
The TSX Financial Services Index has a history of outperforming the TSX Composite from the end of February to the end of May. During the past 10 periods, the TSX Financial Services Index has gained 5.46% per period (plus dividends) versus a gain of 5.09% per period for the TSX Composite Index.
On the charts, the TSX Financial Services Index broke above resistance at 177.76 this morning and is testing its September 2009 high at 181.93. Current intermediate upside potential on a move above 181.93 is to 203.
Chart courtesy of StockCharts.com www.stockcharts.com
Technical action by S&P 500 stocks remains positive. Another eight S&P 500 stocks broke resistance this morning including Akamai, Allstate, Colgate, DirectTV, DaVita, Patterson Dental, Public Storage and Sigma Aldrich. No S&P 500 stocks broke support.
Comments offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. An attempt to provide accurate data has been made, but accuracy is not guaranteed.
Disclaimer: Comments offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. An attempt to provide accurate data has been made, but accuracy is not guaranteed.
Don Vialoux is a research analyst for JovInvestment Management Inc. All of the views expressed herein are the personal views of the author and are not necessarily the views of JovInvestment Management Inc., although any of the recommendations found herein may be reflected in positions or transactions in the various client portfolios managed by JovInvestment Management Inc
More comments are available at www.timingthemarket.ca
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March 2nd, 2010 at 9:49 am
What would your timing be for entry into the financial sector if you consider RSI and stochastics. It seems a little risky with RSI over 70 for many of the big banks.
March 2nd, 2010 at 10:26 am
Hi Roger. Preferred strategy is to buy the sector at current or lower prices. Just confirming that short term momentum indicators currently are overbought.
March 2nd, 2010 at 12:56 pm
Hi. Don:
When we say overbought, is that means a possibility pull back? And when this happened, that would be other chance to enter the sector,right?? Thank you very much for your wonderful work.
All the best!
March 2nd, 2010 at 1:06 pm
Would
HORIZONS BETAPRO S&P/TSX CAP FINS BL ETF (HFU-C)
be a good vehicule to buy the financial sector ?
thank you very much for your website Mr. Vialoux.
J.R.
March 2nd, 2010 at 1:21 pm
Hi Don
BNN said that cameco was down graded today i just caught the end of what they said thought you might know what’sgoing on
thank’s brian.
March 2nd, 2010 at 1:38 pm
Don, if you have a moment what is your view on BRB on the tsx. Is a low 0.60 entry a good seasonal trade for the warmer months?
March 2nd, 2010 at 2:01 pm
Here is more information about the downrating of Cameco by Canaccord’s Orest Wowkodaw. He writes that they have a “slightly lower near-term uranium price outlook.”
“Our C$34 target is based on a higher multiple of 1.6x (from 1.5x) our revised 10% NPV of $21.21. While we remain bullish on the medium- to long-term fundamentals for uranium, we see limited upside in Cameco shares near-term. Cameco is currently trading at a 47% premium to our 10% NPV of $21.21/sj which compares with our uranium-coverage-universe average of a 14.7% premium. Our 8% NPV is $24.33/sh. While Cmaeco is an industry leader, [it] is already trading at a substantial premium to its peer group.
“We adjusted our estimates for the recently announced annual dividend increase to $0.28 (from $0.24). Our revised 09, 10, and 11 eps estimates of $1.40, $0.98, and $1.42 compare to our previous estimates of $2.10, $2.77, and $2.89.”
March 2nd, 2010 at 5:42 pm
Hi Lin. Yes, occasionally a second technical entry point into a seasonal trade becomes available. A recent example was the second entry point for platinum. A third entry point is very rare.
March 2nd, 2010 at 5:44 pm
Hi Brian and Jolly Roger. Best guess is that the analyst responded to news after the close released at http://www.uxc.com/review/uxc_Prices.aspx that the spot price of uranium dropped this week by $1.25 to $40.50 U.S. per lb.
March 2nd, 2010 at 9:25 pm
Hi Don, I notice that you have a tab on your site for “ELLIOTT WAVE”. As you know, Mr. Prechter (of Elliott Wave) feels that the market will probably crash. I recently went to 100% cash. Do you think that this was wise, or should I re-enter the stock market? Thanks Andrew
March 2nd, 2010 at 10:30 pm
Hello Don,
Are you still advising to follow the seasonal chart for the mid term election cycle?
March 4th, 2010 at 7:51 am
# Jolly Roger Says:
March 2nd, 2010 at 1:06 pm
Would
HORIZONS BETAPRO S&P/TSX CAP FINS BL ETF (HFU-C)
be a good vehicule to buy the financial sector ?
thank you very much for your website Mr. Vialoux.
J.R.