Sunday, January 12, 2014

Tax loss selling opportunities:

Last month in a Getting Technical market letter - Interim Update December 4, 2013 GT1417 – subject Tax Loss Selling 2013. I reasoned there to be opportunity due to intense tax loss selling in the commodity related issuers. I ran a stock scan or filter identified as Tax Loss Selling Rebound Candidates 4-Dec-2013. The filter was seeking stocks currently trading greater than 15% below their 40-week MA (deeply over-sold) with the strongest relative perform are BOLD and excluding stocks under $2 and a weekly volume of less than 50,000 shares. The letter cautioned - IMPORTANT: This group has historically printed a significant rally in the first week of the following January but - again a word of caution: Some of these names are simply bad investments so do your homework before acting

The GT letter was assuming about a group 15% bounce by mid January and as we can see in our table the group is almost there with almost a 12% return as a group. Note out of 41 selections only 3 lost money and only 10 under performed the TSX Comp return over the same period.

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