Javed Mirza, technical strategist, Raymond James
FOCUS: technical analysis
Top Picks: Parkland, Gibson Energy, West Fraser Timber
MARKET OUTLOOK:
A new short-term (two to four week) rally phase is taking hold within the ongoing intermediate equity market rally phase that should have upside by the time of the U.S. presidential election in early-mid November. The next upside technical targets are near 6,000 on the S&P 500 Index, 26,000 on the S&P/TSX Composite, 22,500 on the Nasdaq 100, and 250 on the Russell 2000.
New weekly “mechanical buy” signals are in place on most North American equity indices and are consistent with a new intermediate-term (three to six months) equity market rally phase taking hold. Our longer-term technical work suggests that the recent intermediate-term equity market corrective phase from August to September likely marked the transition from phase two to phase three of the Market Cycle Model.
In our view, a move by WTI Crude above important resistance near US$94 would confirm that equity markets had entered phase three of the Market Cycle Model. Our longer-term cycle work indicates that a four-year cycle reset (cyclical bear market) is likely looming in 2025. Ongoing strength in energy and energy stocks would be consistent with a rotation into phase three of the Market Cycle Model and ultimately the peak of the four-year cycle (three to five-year cyclical bull market) that began at the October 2022 lows.
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TOP PICKS:
Parkland (PKI)
Gibson Energy(GEI)
West Fraser Timber (WFG)
All three stocks are showing signs of strengthening price momentum, relative strength is improving versus the TSX Composite. Volume and on-balance volume are showing signs of institutional accumulation. All three of these indicate the technical profiles of these stocks are strengthening and are supportive of further upside. In addition, GEI and WFG recently broke out to new all-time price highs, a strong technical positive.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| PKI | N | N | N |
| GEI | N | N | N |
| WFG | N | N | N |
PAST PICKS: JULY 19, 2023
Ivanhoe Mines (IVN TSX)
- Then: $ 12.80
- Now: $ 19.435
- Return:51.85%
- Total Return: 51.83%
National Bank of Canada (NA TSX)
- Then: $ 100.95
- Now: $ 132.17
- Return:30.92%
- Total Return: 37.63%
Franco-Nevada (FNV TSX)
- Then: $ 195.40
- Now: $ 174.66
- Return:-10.60%
- Total Return: -9.30%
Total Return Average: 26.72%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| IVN | N | N | N |
| NA | N | N | N |
| FNV | N | N | N |