Nortel and Bottom fishing

Bottom Fishing

Some rules.

Use stops - bail on a new 52-week low.

Make sure the sector (technology) is also recovering.

Ignore the bad news - In fact embrace it!

Watch the VOLUME - see if there is a notable increase along with a RISING price

See if the price can push above a prior trading high

See chart below

Note the important $7.15 level - note the increased volume - note the tech recovery in the US

Bill Carrigan

Below - Nortel - w/Cycle Study, Money Flow and Volume

Goldcorp vs the TSX Comp

Relative Performance Analysis

We run relative analysis (RA) filters on several stock screens - financial - metals - gold - silver - energy - technology - health care - alternate energy - oily trusts - gassy trusts - business trusts - aerospace - rare metals - an so one

A recent RA study of the TSX60 components vs the index displayed several topping gold stocks

See chart below



Bill Carrigan

Below - Goldcorp vs. the TSX Comp

Telus

A quote from Technical Analyst, John Murphy

The triple bottom is a reversal pattern made up of three equal lows followed by a breakout above resistance. While this pattern can form over just a few months, it is usually a long-term pattern that covers many months. Because of its long-term nature, weekly charts can be best suited for analysis. We will first examine the individual parts of the pattern and then look at an example


Telus could be a candidate for a triple bottom - we need a move above $48 to confirm the bottom


Bill Carrigan

Elliott Wave

A word on Elliott Wave

IF our bottom on the US Housing stocks was in early January’08 we need to have a higher low in March’08

AND

The higher low must be accompanied by more investor doom and gloom than existed during the lower low - Divergence between price and investor sentiment is the key

Surely the Higher low during the Bear Stearns panic of last Monday confirms the January bottom

BSC

On Crisis and Panic There is a difference

A panic event is a sudden short-lived reaction triggered by intense fear - be it real or imagined. A panic event will rarely introduce a bear market but a panic event will sometimes mark the end of a bear market.

A crisis unlike a panic is of longer duration due to its complex and uncertain outcome. A crisis will usually introduce a bear market in the related market sector.

Monday’s collapse of Bear Stearns was a panic event effectively ending the crisis


Bill Carrigan

Moly Scarce metal play

Gold and silver are red hot - if you can't take the heat look for a laggard in the "scarce metals" sector - something like MOLYBDENUM.

If your like us with no idea who mines the stuff look at -

SPROTT MOLYBDENUM PARTICIPATION CORPORATION invests in securities of private and public companies that explore for, mine and/or process molybdenum and by investing in, holding, selling all commercial forms of molybdenum.

It listed on the TSX under symbol MLY

A risky fun play

Bill Carrigan

Oil Sands

For GT blog March 12, 2008

Forget those Oil Sands plays - We used to call it the Tar Sands

Yes crude is over $100 but it needs to go to $150 to help the tar sands players because they have lots of problems to overcome

The environmental issues are huge - water - green house gasses - provincial royalties - rising costs

The chart is technically over bought and building a large bearish Broadening top formation

The short - intermediate and long term stochastics are all topping at the same time

Sell this puppy before it grows into a mature dog!

Bill Carrigan

Buy - Hold & Prosper?

This is how to make a fast $5800 in the stock market and no need to invest in those risky penny mining and biotech stocks – This is possible with one trade in one of Canada’s most respected technology companies.

First you need about $1 million dollars

On July 2000 buy 8000 shares of Nortel for $124.50

Following a 1 for 10 reverse split Dec 2006 you would now own 800 shares of Nortel that trade for about $7.30

That works out to a market value of $5840

Should have bought RIM

Bill Carrigan

Financial's Continued

Sector Rotation - if you get it right you can beat the broader markets

In 2001 - 2002 the Financial stocks powered upward as the Technology stocks torpedoed

Now in 2007 - 2008 the Financial stocks torpedo as the Material stocks power upward

The ratio chart below clearly displays the divergence in performance among stocks in the same peer group - in this case the bank stocks

The lower histogram is a relative performance study based on several time periods
At the moment we are in the - own TD and - sell BMO mode

See next more on this - next blog posting

Bill Carrigan

Sector Rotation

Sector Rotation - if you get it right you can beat the broader markets

In 2001 - 2002 the Financial stocks powered upward as the Technology stocks torpedoed.

Now in 2007 - 2008 the Financial stocks torpedo as the Material stocks power upward.

The ratio chart below clearly displays the buy-materials and sell-financial signal of late 2006

When the reversal comes we want to be there -

Best guess - April 2008

See next more on this - next blog posting

Bill Carrigan