Globe FNX Mining, could be set to move higher

2009-01-29 09:04 ET - In the News

The Globe and Mail reports in its Thursday, Jan. 29, edition that while many stocks are suffering, some are bucking the trend.

The Globe's Scott Adams in the Number Cruncher column attempts to identify stocks with the best price momentum within the S&P/TSX composite index.

When a stock trades significantly above a moving average, it can be a sign that it is overbought and due for a pullback. It may be a good time to take some profits. Conversely, if a stock is trading below a moving average, it may be oversold and worthy of a closer look as a bargain.

Mr. Adams attempts to root out Canadian stocks and trusts that are trading beyond their 50-day moving averages. Mr. Adams notes that at the beginning of last year, this screen would have produced a table full of stocks that were trading well beyond their 200-day moving average.

There are few of those cases now. A very bullish signal that momentum will continue is when, together with increasing trading volumes, the 50-day moving average climbs above the 200-day average.

Stocks making it onto Mr. Adams's list are Gerdau Ameristeel, Energy Savings Income Fund, First Quantum Minerals, Inmet Mining, Agnico-Eagle Mines, Cardiome Pharma and FNX Mining.

Hg