Tech Talk for Friday February 17th 2017

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Editor’s Note: Next Tech Talk report is released on Tuesday February 21st. Monday is a holiday for U.S. markets

 

Pre-opening Comments for Friday February 17th

U.S. equity index futures were lower this morning. S&P 500 futures were down 8 points in pre-opening trade.

SunLife (SLF $49.94) is expected to open lower after RBC Capital downgraded the stock to Sector Perform from Outperform.

Campbell Soup slipped $0.50 to $62.05 after reporting lower than consensus fiscal second quarter revenues.

Kraft Heinz added$4.18 to $46.50 and Unilever gained $4.18 to $46.50 after Kraft Heinz made a proposal to merger with Unilever.

Deere gained $3.53 to $112.70 after reporting higher than consensus fiscal first quarter earnings.

General Mills dropped $2.85 to $58.69 after lowering its sales guidance.

EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2017/02/16/stock-market-outlook-for-february-17-2017/

Note seasonality charts on Initial Jobless Claims, Philly Fed Index, Housing Starts and Home Building Industry.

Observation

The Australia All Ordinaries Composite Index moved above 5,876.80 to a two year high extending an intermediate uptrend.

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StockTwits Released Yesterday @EquityClock

Health care leads the market to new highs as the sector pushes above an ascending triangle pattern.

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Europe iShares $IEV moved above $40.33 extending intermediate uptrend.

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Technical action by S&P 500 stocks to 10:10: Bullish. Breakouts: $AMZN $GPC $STZ $LH $SRCL $APH $IFF. Breakdowns: $AVP $ZTS

Editor’s Note: After 10:10, breakouts included WBA, PSA, ITW, PFE and NI

Pfizer $PFE, a Dow Jones Industrial stock moved above $33.49 establishing a new intermediate uptrend.

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Trader’s Corner

Daily Seasonal/Technical Equity Trends for February 16th 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

Daily Seasonal/Technical Commodities Trends for February 16th 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

*Most of the change in score for gasoline was caused by a rollover in futures contracts (as opposed to a real change in the price of gasoline).

 

Daily Seasonal/Technical Sector Trends for February 16th 2017

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Green: Increase from previous day

Red: Decrease from previous day

 

S&P 500 Momentum Barometer

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The Barometer slipped 0.80 to 76.00 yesterday. It remains intermediate overbought.

 

TSX Momentum Barometer

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The Barometer added 0.42 to 71.25 yesterday. It remains intermediate overbought.

 

Disclaimer: Seasonality and technical ratings offered in this report and www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed

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39 Responses to “Tech Talk for Friday February 17th 2017”

  1. Vik Says:

    G’Mornin’ folks,
    Huge spike in CPG.TO apparently from activist rumors

  2. Vik Says:

    Will be interesting to see how this reaction plays out
    Went from $14.95 at the open to $16.02. Now it has pulled back to $15.50.

  3. Sandra Says:

    Ron/BC:
    Enjoy Arizona Ron. Very beautiful and scenic I hear and best of all no pains and aches in that climate 😉 My Doctor has told me numerous times my health issues would disappear if I lived in that climate. Don’t sweat the small stuff that happens ..it happens and gets resolved; think of the great time s in Arizona!

    So all the best and stay in touch. Will look forward to your posts from your new laptop.
    Bon Voyage !

  4. Sandra Says:

    Ron/BC:
    Thank you for so well laid out TECK/B.TO charts from yesterday.

  5. Ron/BC Says:

    Sandra
    Thanks,and here is a chart that should make your day! (so far)

    http://stockcharts.com/h-sc/ui?s=CPG.TO&p=D&yr=0&mn=6&dy=0&id=p49762331110&a=501982376

  6. Sandra Says:

    Ron/BC:
    Want to add but worried that if rumour has no legs than what??

  7. Sandra Says:

    Info. on CPG.TO takeover rumour:

    Shares of Crescent Point Energy (CPG.TO 6.57%) surged as much as 6.3 per cent after an unconfirmed report from DealReporter said an unidentified U.S. activist investor was circling the company. The report cited an investment banker as saying he heard a firm is building a position in the medium and light oil player, which has seen significant pressure on its share price over the course of the last three years. The report failed to identify the activist.
    Crescent Point was not immediately available for comment.
    Crescent Point could be a difficult candidate for activist intervention due to its large institutional investor base, a source familiar with Canadian board battles told BNN. Additionally, the source expressed incredulity activist investors are prepared to re-enter the Canadian energy patch without significant confidence they could gain a controlling stake in the target company.

  8. Ron/BC Says:

    Sandra
    I thought CPG.to was one that you had a lot of and were underwater with. I said if I owned it I’d sell it if underwater. Or trade it in for something in an uptrend. Think of it as a car crash. The car isn’t worth fixing,just walk away and get another car. But that’s just me. We all have our own ways of dealing with these things. But no I wouldn’t add to it regardless. Decades ago I got hammered with IBM options and the stock and I’ve never traded it since and don’t even look at the chart. Because as human nature goes I know I’d likely try to “get even with it” and that would cloud my objectiveness and end up costing me more. No one can sabotage you better than yourself.

  9. CanJan Says:

    Confused (what else is new?)
    What is meant by latest Equity Clock Tweet?
    “Early warning sign on “Trump Bump” stocks. $MLM broke $218.72 completing a double top pattern”

  10. Ron/BC Says:

    With all the talk about steel companies I see the steel ETF:SLX is bumping up against its four year high resistance of $45 for the 3rd time. This needs to be cleared to suggest further gains ahead. Meanwhile resistance is just that and there is a lot of it at $45.

    http://stockcharts.com/h-sc/ui?s=SLX&p=D&yr=9&mn=0&dy=0&id=p22189691740&a=505749892

  11. NeilAB Says:

    Ron/Bc
    From a couple of days ago re: Spartan
    Fair enough. I do hope you understood my reaction to being offered a 15 year chart on a short term play. I’ve convinced myself that I over-reacted and I apologize for that.
    Anyway, of hopefully more interest, I do know as you mention that you don’t use MACD. I had quit using it also. Then, I started reading more Alexander Elder. His ‘impulse system’ is so simple and is only based on two variables: the 13ema and the macd historigram. If both are ascending you get a green, if both are descending you get a red. One of each is a blue. However, it is to be noted that green, in the system, doesn’t mean ‘buy’, it means ‘don’t short’. likewise red.
    Also, of interest, is his reliance, like yours, on lateral support/resistance. As he says, and which I have certainly found, trend lines are too subjective. You can get three points almost anywhere you choose. Lateral is much more important.
    Anyway, not sure when you’re leaving, but hoping you have a great time down south.
    N

  12. Ron/BC Says:

    Neil/AB
    Understood. All I can do is post what I see and I’m always concerned about the long term price pattern even though I don’t really care about the long term and always trade short term. I just find there are often consistent support and resistance levels on them and many short term charts don’t show much of anything in that regard unless you go to intraday charts. At that point you have become in intraday trader. Can’t even go for a leak when you get into intraday charts and take a position. But as far as indicators go I have read books by Alexander Elder and his work is first class. And I see he is using just a couple of main indicators to make decisions. Most traders have a dozen indicators on their charts many of which are much the same thing such as multiple momentum indicators. The MACD of various combinations is a good indicator as it is a smoothed indicator crossing over another smoothed indicator so it does work well. The MACD Histogram works well too. And the 13ema is a Fib number and also works well with many other combinations. The point is keeping it simple with indicators like that will reap rewards far more than using a dozen of them. Agree angled trendlines are very subjective but to my own amazement do seem to work most of the time. I guess many traders use them so make them work often. I do use them but the lateral lines are where traders are consistently buying/selling and shorting etc. Glad you have found a combo you are comfortable with. I had so many trading books that I eventually threw most of them out,especially the intraday trading systems. I was going to post a trading system I paid $500 U.S. for here for the day traders but I can’t remember all the rules,lol. Looked all over the place for the papers but can’t find it. Perhaps I through it out with the bath water too. That system used the 22ema & 50ema and only went long when the 22ema was above the 50ema and short on the opposite and with 5 minute charts. Just can’t recall what the trigger was. But there are tons of books with intraday trading systems. I still prefer Daily charts as that’s what I learned on and make sense to me. Thanks for the post.

  13. Ron/BC Says:

    Neil/AB

    That short term trading system I took with 5 minute charts also used the MACD. Just can’t recall the rules for buys and sells.

  14. NeilAB Says:

    Ron
    Well, further to your point, it is interesting that integral to the Elder system is that it requires at least two time frames before making an investing decision. So, if you’re a daytrader perhaps 5 minute and hourly. If you’re a trend trader then daily and weekly. So, for example, in the latter, if a green shows on the dailies, you could not buy unless it also shows on the weeklies.
    Quite interesting, and, again, all based on Macs historigram and 13ema.
    Also, though somewhat beside the point, I just finished reading a great book by Daniel Kahneman, a behavioural psychologist/economist who got a Nobel prize in Economics (for what that is worth). His basic jist, if I can be so bold as to summarize in a few words, is that human judgement is so frail that we should rely on algorithms wherever possible.
    It is our nature to see patterns where there aren’t any other than those offered by chance and which we mistake as meaningful etc. As such, He is quite dismissive, of course, of both t.a. and the apparent success of some portfolio managers etc.
    We’ve all heard this is various forms before. (though his research is really quite convincing).
    Anyway, what was kind of interesting is that in reading the latest Elder book to find that he had also read Kahneman’s book, and was so impressed with it that he actually made a concertive effort to reconstruct his investment approach to make it less subjective by implementing a more objective ‘scoring system’ based on some of Kahneman’s observations.
    Will this help me with Spartan tomorrow or next week? Of course not. I just found it interesting that one of the more respected traders of our time was prepared to acknowledge and accommodate the insights of someone whose views were quite contrary into his trading platform. Pretty freaking smart guy.

  15. Ron/BC Says:

    Neil/AB
    I agree with the human judgement assessment. I commented earlier that no one can sabotage us like ourselves. I often use the Elder Impulse Bars indicator on Stockcharts.com which is Elder’s work using the 13ema and 65ema and his rules. Simply watch the colored bars for signals. I do add the RSI and horizontal support and resistance and angled lines for a guide. But those colored bars are a good heads up short term on the Daily charts or intraday charts. Don’t know if you’ve read the numerous links to Elder Impulse Bars on Stockcharts but here is the link.

    http://stockcharts.com/search/?q=elder+impulse

  16. dutchcanuck Says:

    Bruce Flatt, Brookfield Asset Mgt CEO purchased 700,000sh of BAM/A at $36.8821US to hold 28,725,571s.
    Guess he takes “You can never have enough Brookfield” very seriously.

  17. Bernie Says:

    dutch,

    Re: # 16
    It would be interesting to see what else is inside Mr Flatt’s portfolio. Are there any sites which show recent holdings of various financial gurus?

  18. Bernie Says:

    An interesting look at the Dogs of the Dow strategy and possible variations of it:
    https://www.stockrover.com/blog/dogs-of-the-dow-strategy/

  19. Bernie Says:

    This might also be interesting for some:

    “This Week in Ideas: Dogtown
    In this week’s Ideas panel, we bring you multiple variations on the original Dogs of the Dow screener, several of which were presented in the above article. See Value Dogs, Dividend Growth Dogs, Out of Favor Dogs, and more. We also have a Large, Low-Risk Dividend Payers screener to help you find blue chips. See if there’s a dog waiting for you!”
    https://www.stockrover.com/markets/ideas

  20. FishFat Says:

    BAM/a.to
    Brookfield Asset Mgmt broke out of a trading range this week. The breakout volume was not impressive, and the OBV is flat – suggesting lacklustre conviction. But, SCTR has spiked to 75, DMI+ is dominant, and the BB width is low – might be interesting to watch. I do not own and not buying.
    FF
    http://stockcharts.com/h-sc/ui?s=BAM%2FA.TO&p=W&st=2014-08-01&en=today&id=p48107900310&a=507693616

  21. Bernie Says:

    For option players…
    This Microsoft (MSFT) Trade Could Deliver a 13.2% to 21.5% Annualized Yield:
    http://tradesoftheday.com/2017/02/16/this-microsoft-msft-trade-could-deliver-a-13-2-to-21-5-annualized-yield/

  22. LonyJ Says:

    Dutch – re BAM-A
    Because of the discussions here about BAM-A and the related Brookfield companies I have been studying it to buy and trying to see the attraction. So far, the low 1.4% dividend and relatively (to big banks) high 17.7 p/e are discouraging. Upside is great chart since 2009 (except for 2015) and now at double top with 2 years ago.
    Your reference to CEO buying and ‘can never have enough Brookfield’ encouraged me to look at the insider trading info available at TDW ‘ink insider research’. They say that over the past year the public market bias by company officers and directors has been net selling $45 million.
    The 700,000 shares you mention are reported as ‘compensation for services’ and indirect ownership(?). There is much more information there that perhaps someone more familiar with this subject can comment on, but as I see it, insiders are selling, not good.
    As I have mentioned previously, I am a newbie at trying to wrap my head around the fundamentals that matter when building a dividend portfolio. Any comments / guidance appreciated.

  23. FishFat Says:

    re: $WTIC
    The chart for $WTIC shows a lot of overhead resistance. Resistance at $54.24 is proving to be problematic, but even if that is exceeded there is a gap area from $55.34-$56.50 (shown in pink on the chart) that will likely be difficult to overcome.
    FF
    http://stockcharts.com/h-sc/ui?s=%24WTIC&p=W&yr=2&mn=4&dy=0&id=p69693151494&a=407317138

  24. LonyJ Says:

    Bernie- re StockRover
    Thanks for the StockRover links.
    Your guidance from earlier this month to the little book, morningstar key stats, the all stars, etc has been keeping me busy.
    The StockRover ranking approach may be what I need to help ‘boil it all down’.

  25. Bernie Says:

    LonyJ,

    Sorry to butt in as your comment was directed to dutchcanuck.

    Its tough to give you any guidance regarding dividend or dividend growth investing when we don’t know your level of knowledge or what type of “dividend portfolio” you’re trying to build. What is more important to you dividend yield or dividend growth? Your comments on BAM.A’s “low yield” suggests you prefer a somewhat higher dividend yield. If this is the case are you retired and needing income now or in the near future? If you’re younger and have a long time frame before needing income I suggest forgetting about yield and concentrating on dividend growth stocks with higher DGRs. As I said its difficult to get a bead on what exactly you’re after. Perhaps you might find the article “How to Start Investing in Dividend Paying Stocks” of some assistance to you.
    http://www.tawcan.com/start-investing-dividend-paying-stocks/

  26. Bernie Says:

    LonyJ,

    Re: #24
    You’re welcome. Perhaps the “Chowder Rule” might help you in your sorting and “boiling it all down”. The Chowder Rule is simply the annualized 5-Yr DGR + the dividend yield. I suggest googling it to get more info.

  27. Bernie Says:

    Further to #26:
    The CCC list and Canadian Dividend All Star List include the Chowder Rule number for each listed stock.

  28. LonyJ Says:

    Bernie
    I appreciate your time.
    We are retired, have a modest nest egg and some pension, no debts, have invested DIY (mut fnds, stks, etfs) for years. Never really very good at it.
    I am starting to see the need to ‘tap the egg’ in the next few years.
    My objective for the stock market equity portion is total return with solid dividend base averaging 3%.
    So my thought is to ‘StockRover’ for tsx, high div (1.5 to 6.5), high chowder (min ), max payout 60%, max 15 forward p/e, + +.
    Comments appreciated.

  29. LonyJ Says:

    Bernie – just went thro twacan – great – tnks

  30. Bernie Says:

    LonyJ,

    Re: #28
    I get StockRovers free newsletters but don’t subscribe to their service so I sorted the Canadian Dividend All Star List of Jan 31 per your firm requirements. Hopefully you don’t mind, I added one more criterion to your list…no past dividend cuts. The stocks which met all requirements filter down to the following 7 stocks:
    Home Capital Group (HCG.TO)
    Exco Technologies Ltd (XTC.TO)
    Genworth MI Canada Inc (MIC.TO)
    Toronto Dominion Bank (TD.TO)
    Canadian Western Bank (CWB.TO)
    Royal Bank of Canada (RY.TO)
    Laurentian Bank Of Canada (LB.TO)
    An equally weighted mix of the 7 stocks have these average numbers:
    Current dividend yield = 3.67% (2.72% to 5.39%)
    Average payout ratio = 41.17% (25.23% to 53.63%)
    Average forward P/E = 11.43 (7.58 to 14.43)
    Average Chowder Rule = 16.4 (12.0 to 24.4)
    Average annualized 1-Yr DGR = 8.6% (4.5% to 16.7%)
    Average annualized 3-Yr DGR = 11.4% (6.0% to 22.0%)
    Average annualized 5-Yr DGR = 12.7% (7.8% to 20.9%)
    Average annualized 10-Yr DGR = 13.0% (7.4% to 21.9%)

  31. dutchcanuck Says:

    Bernie #17
    I searched hi and lo for that info. Finally found a reference to a site that said “Bruce Flatt, equity investment” But the aha moment died as the site had blanked out all date.
    Guess the info is sorta private.

  32. dutchcanuck Says:

    FishFat #20
    Thank you for your response.
    I also noted the tepid breakout on BAM/A, which is the reason I haven’t bought it yet’
    I was intrigued however by the 2yr rectangle from which we broke out, indicating a potential measured gain of about $7.
    Already own sizeable positions in BIP, BEP and BPY and recently sold BOX into the takeover bid, so I am in no rush.
    Also I am more of a fundamental investor and only use the charts to select buy and sell points

  33. LonyJ Says:

    Bernie – re your ‘all stars list’ work
    Thanks for the time you have put in on my behalf.
    My job now is to see if I can replicate your juggling skills with the list.
    Once that is in hand, I can work to broaden the list to 25 or so positions to wait for the dip to buy.
    I’ll keep you posted on my progress.

  34. FishFat Says:

    dutchcanuck, re: BAM/a.to
    In addition to the 2yr box range you mentioned, the blue lines on my chart are meant to indicate a Ascending Triangle chart pattern with a measured rule “potential” of $10. That is all notional of course, but still an interesting chart to watch.
    FF

  35. dutchcanuck Says:

    LonyJ #22
    Well, where do I start. I get my insider trading info directly from the Baystreet website.
    Essentially if Bruce Flatt wants to hold an additional 700K shares that can only be viewed as positive. I also checked the div and it’s currently 1.4967%, but let me explain this business model. For years now major capital in this world has been investing in infrastructure assets.
    The Brookfield guys are masters at this. In the parlance of the trade they are known as expert grave dancers. In other words they are extremely adroit buying assets when the economy somewhere in the world is in bad shape and certain parties are forced to sell, hence the grave dancer term. Brookfield virtually has access to unlimited capital at very low rates, so they are well positioned to take advantage of any global opportunity. They raised $30B of capital in 2016, so conjure up what’s coming down the pipe.
    Here are some of the highlights of the 2016 results:
    FFO-free cashflow up 26% y-o-y. P/E in this business is useless, because assets get revalued constantly and that impacts earnings.
    New investments of $20B. Fee revenues up 31%. Fee related earnings up 44%. Gross margins up from 57% to 62%. This company is a cash generating machine with unparalleled management.
    Now if I owned no Brookfield my first purchase would be BIP/UN.
    I bought mine in early 2015 and my capital gain is 37% beside those juicy divs.
    I also own BPY/UN with a capital gain of 38% with similar divs.
    Own BEP/UN little(disappointing) cap gains but a 6% div.
    Owned BOX/UN, just sold it into the takeover bid and will consider BAM/A with the funds.
    I also plan to have a good look at BPP/UN, looks like they are pouring a lot of capital into that new entity.
    And you are right to heed Bernie’s comments. He has an extremely successful investment style and it’s unwavering. Well almost, he does get frisky every once in a while.

    And sorry for being so wordy. Must be the weather.

  36. LonyJ Says:

    Bernie – re your all stars list work
    Did you use the ttm p/e?
    Is there a way to tease the forward p/e out of the all stars list?
    I assume it was ‘no dividend cuts for 5 years.
    I replicated your list, no surprise, but I was not sure I could figure how to do it.
    I relaxed the min chowdwer to 10 and added the ‘others’ list, giving me a list of 28 contenders to whittle down.
    Many thanks – but be warned, I’ll be back with questions!!!!!

  37. LonyJ Says:

    dutch – re Brookfield
    Thank you very much for the detailed report on bam-a etc.
    I need to develop an understanding of what metrics are applicable to various industry groups.

  38. Bernie Says:

    LonyJ,

    Re: #36
    I only used what was available with the All-Stars list so I did use the TTM P/E. Unfortunately to get the forward P/E you’d have to go to a different source, like Morningstar, and manually plug them in. All stocks in the All-Stars main list have at least 5 years of raises with no dividend cuts or freezes. In the list I made up for you I eliminated stocks which had cuts in any of the years shown (2002-2016), ie; no negative numbers in columns BH through BU. If you decide to add the “others” list I hope you’re aware that several members have little to no streaks. I’ve incorporated this list before but have usually drawn my “line in the sand” at 3 years. I have no comment to you relaxing the chowder # to 10. What’s important to some isn’t important for others. Feel free to fire away with more questions.

  39. LonyJ Says:

    Canadian dividend aristocrats vs Canadian dividend all stars.
    There are 64 stocks in the aristocrats list and 101 in the all stars list.
    I can not find what metric excludes all stars from the aristocrats.
    For example, AD and BIP-UN are in all stars but not in aristocrats.
    tia

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