Saturday, June 15, 2013

A stock pickers market:

I see the shares of Sears Canada Inc. (SCC) popped 14% last Friday on the news of some big store closings. The market seems to value the company more if dead than alive. Another great shrinking Canadian retail legend is Hudson's Bay Company (HBC) the folks responsible for the decay and closings of Zellers. If you’re a stock picker you would avoid these turkeys  

If you’re a stock picker you would also avoid “timing the market” and also avoid the broader ETFs like the TSX listed XIU or the NYSE listed SPY because just owning the market is a no-brainer strategy.

At the close Friday I ran a stock filter on the TSX to scan for a weekly key reversal to the upside. I got about 70 names which included several oilfield service stocks and some base metals stocks. According to – A key reversal is a one day chart pattern where prices sharply reverse during a trend. In an uptrend, prices open in new highs and then close below the previous day's closing price. In a downtrend, prices open lower and then close higher. The wider the price range on the key reversal day and the heavier the volume, the greater the odds that a reversal is taking place

Now I don’t place too much importance to a one-day reversal so I only rely on weekly reversals. One example is Lundin Mining Corporation (LUN) $4.35 displayed in a chart along with money flow and the Coppock Curve setting out three low risk cyclic lows (A,B and C) that line up with a key reversal.

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