Despite softer than expected retail sales numbers for March, the Canadian dollar continues to rise, trading in the range of $0.89 US. Also the Canadian markets have been the best performing markets in the last few months, gaining almost 10%, despite the sell-off yesterday. However, the markets remain in a bottoming condition since all major indexes remain below the key 200 day moving average. AIG, is proposing the 20 to 1 reverse stock split. This is designed to make the stock price look like it has improved however research has shown that the majority of stocks that engage in a reverse split gradually drift back to their previous lows. Nortel Networks (N) is a good example of a company that employed this strategy and is now in bankruptcy protection. Do not let such a strategy give you a false perception regarding the company value. Fundamentally, the key piece of data that has the most effect on the share price is earnings. Long term price appreciation is dependent on consistently growing earnings. On a short term basis stock prices can be impacted by other news or expectations, but longer term, earnings prevail. In fact, research by successful investors indicates that stocks that show earnings growth in the top percentiles, combined with relative strength ratings over 80, provide the best potential for future gains.
Futures are pointing to a positive open this morning along with the DAX. The market bias indicators are showing some statistical bias to the upside, but not overwhelmingly strong. The market condition scans are showing a slight bias to a down close for today, but once again, the numbers and energy are weak.
| Index | Change | %Change | Level | Phase |
| TSX | -282.85 | -2.76% | 9949.59 | Recovery |
| DJIA | -129.91 | -1.54% | 8292.13 | Recovery |
| Nasdaq | -32.59 | -1.89% | 1695.25 | Recovery |
| SP 500 | -15.14 | -1.68% | 888.33 | Recovery |
| Russell 2000 | -8.13 | -1.66% | 481.22 | Recovery |
| NYSE | -89.85 | -1.53% | 5780.84 | Recovery |
Source: Telechart
Short Term market outlook:
Bias: Scans showing a neutral bias but more positive momentum than negative momentum
Energy: moderate to weak
Primary Trend: Remains down to sideways
| Sector | Phase |
| Consumer Staples | Recovery |
| Healthcare | Recovery |
| Technology | Recovery |
| Utilities | Recovery |
| Energy | Recovery |
| Financials | Recovery |
| Industrials | Recovery |
| Materials | Recovery |
| Consumer Discretionary | Recovery |
Source: Telechart
Posts
No comments:
Post a Comment