Keith Richards, president and chief portfolio manager of ValueTrend Wealth Management

FOCUS: Technical Analysis

MARKET OUTLOOK:

There’s enough evidence to suggest markets reached a stage of complacency recently. In our investor newsletter sent the first week of February, we suggested the S&P 500 Index (SPX) would probably breach 5,000, and then see a likely pullback in the latter half of February or early March. The SPX did breach 5,000, and at the time of writing, it seems to be waffling near that level. The technical indicators I follow (price momentum and money flow) suggest an overbought market. The sentiment indicators I watch (smart money/dumb money indicators and options activity) also seem to back my prognosis for a potential pullback. We’re looking at anywhere between 4,800-4,600 as a good landing spot for the SPX. ValueTrend is holding a bit of cash (10-12 per cent), and expects to deploy that cash as the market presents new value stock opportunities in the coming days or weeks.

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TOP PICKS:

Dollar General (DG NYSE)

Good value play, looks to be basing and moving up.

Canadian Natural Resources (CNQ TSX)

One of many oil stocks we like. We are bullish on oil.

iShares Global Agriculture Index ETF (COW TSX)

Looks to reach the top of its trading range near $37.

PAST PICKS: December 18, 2023

VanEck Oil Services ETF (OIH NYSEARCA)

• Then: US$307.92
• Now: US$301.56
• Return: -2 per cent
• Total Return: -2 per cent

Canadian Western Bank (CWB TSX)

• Then: $31.28
• Now: $29.17
• Return: -7 per cent
• Total Return: -6 per cent

SNC-Lavalin Group (ATRL TSX)

• Then: $41.44
• Now: $43.64
• Return: 5 per cent
• Total Return: 5 per cent

Total Return Average: -1 per cent