Weekly Commentary

The more I play around with the FINVIZ (Financial Visualizations) site, the more I seem to like it. It has tons of utilities, a fairly good stock screener, intraday heat maps (sectors that are doing better than others during the day) and has a futures map I look at all the time, tons of fundamental data on companies and a why to create private or public chat rooms where you can upload with a few simple keystrokes intraday, daily and weekly charts. The only thing is that they only carry U.S. exchanges (AMEX, NASDAQ and NYSE). If you play on the U.S. market, take the time to look at this site, I think you're going to enjoy it.

Sure didn't take long for the DOW to get back into an overbought condition from its recent pullback. I currently have 12391 as resistance and we closed the week below that. If this is the start of another overbought condition like the last three we've seen, we could be seeing 13000 on the DOW in no time at all, although with the flat top this week, we could be looking at a pull back to the 50 SMA before moving onwards.

Do you realize we are only 800 points away from the 2008 all time high on the TSX and the CDNX is recovering nicely from its recent healthy pull.

On the new course front, I've given up trying to fix all these links and went back to the design program to do them correctly from within the program because I realized that if I tried to rush this by just fixing the web links, if I ever put out an update on the course, I would have to re-fix the links again. So this has set me back a good two weeks in releasing the course for now. I'll continue to keep you posted on my progress is correcting this (pain in the butt) technical problem I'm having.

Cheers and happy trading!

Aberdeen International Inc. (TSX: AAB)

Recently I've been looking at chart patterns that are less talked about than the common patterns we see all the time and started to look for them in my scans. In the case of Aberdeen it was a Broadening Wedge, where the price move between two widening trend lines. There's not much written about this type of chart pattern that I can find and I've only seen it mentioned twice in my collection of Technical Analysis books I've read (over 30 of them so far). So by looking at this chart, it might still be too early to take a position in it as I expect it to bounce off the bottom orange trend line before making its next leg up, but I have added it to my watch list with an alert to notify me when the price move above the top downwards trend line.

But this may be a little too conservative of an entry for some (including myself). What I will be looking at is a continued decline to about $0.80 where it should be touching the bottom orange trend line and them wait for the Slow Stoch indicator to start turning upwards like it did the last time it started to move up (highlighted by the red circle in the Slow Stoch chart). At that point an entry at $0.85 would be good with a stop loss as the yellow support line at $0.82 or just below that. First target would be resistance at $0.96 for gains of 12.9%. The high target of this play would be the top orange trend line which in about a month or so should be around $1.30 for high gains of 52.9%.

Augusta Resource Corporation. (TSX: AZC)

Augusta Resources is forming a Bullish Pennant which should break out (or break down) this week. Volume has been relatively low for the last two or three weeks as expected when forming a Bullish Pennant, so watch for volume to increase as it tries to break the down trend line but be careful, false break outs are common with this formation and often return into the formation the same day or the day after.

As we are nearing the apex of the formation there isn't many days to watch it. To be on the safe side of this play, I would wait for the breakout and a confirmation candle (green candle) once it has moved above the top trend line. This should place your entry around $5.20 with your stop loss being the low trend line, or just below. First target is not all that impressive and is at $5.45 for gains of 4.8% but the second target looks better at $6.10 for gains of 17.3%.

Brigus Gold Corp. (TSX: BRD)

Brigus Gold is again on my radar screen as a potential 200 SMA pop and a break of the downtrend. Friday's high volume came in around noon as the price moved 2% above the 200 SMA at $1.58, but volume tapered off in the afternoon so I'm not sure if this was automatic trading or not that triggered the buying. In any case, it closed above the 200 SMA but did not close above my resistance line at $1.60. Monday should be an interesting day for it. Should it move above the $1.60 resistance line I think this would be a good entry and the stop loss would be the 200 SMA line.

I expect to see the next resistance line at $1.77 as the first target for Brigus giving us gains of 10.6%. Second target is the psychological resistance of $2.00 (remember that round numbers often form resistance/support areas) for gains of 25%.

Sulliden Gold Corporation Ltd. (TSX: SUE)

Sulliden caught my interest last weekend when I was doing my scans because of the number of red candles it had in a row, six of them. You typically see a reversal after five to seven red candles so I added it to my watch list and I've been looking at it this week. It has resistance at $2.00, has been posting higher lows and what looks like an Ascending Triangle formation but there isn't enough candles to call it that really.

An entry here might be interesting to see if it breaks the down trend because if it does, the target is $2.43 for gains of 21.5% as indicators have started to turn upwards from an oversold condition.

Medallion Resources Ltd. (TSX-V: MDL)

The last one this week was brought to my attention by a member in our chat room who noticed the increase in volume and he had an alert setup in QuoteTracker that would notify him when the price moved above the 200 SMA line and correctly identified a Falling Wedge pattern that was breaking out on high volume.

I don't think this play is over and has a potential to test the next resistance line at $0.59 for gains of 35.6% from an entry of $0.435 if you can get this on Monday. But with the high volume it had on Friday and a strong close, it would not surprise me to see it gap up at the open. Just remember the morning caffeine rush you get from 9:30 am to about 10:15 am, this is the time where we often see a pop in the early trading session and then a pull back. By 10:30 am the pull is generally over and the second wave of traders start to look for a good entry position if they've missed the first pop. So keep this in mind of you're going to take position in this and watch your intraday chart to find the best entry.

Many people look at price charts and wonder if the price is going to go up or down. They invest their hard earn money in the hopes that they picked the right direction and get upset at the markets when it doesn't. It wasn't the market's fault, you did no better than to toss a coin in the air and called heads or tails. Blame the coin!

There is a better way to invest your hard earned money and that is to spend a little time each week looking at the charts and understand what they are telling you. This is the work of a Technician, a person who uses Technical Analysis as his or her method of investing into the stock market.

The first thing you need to spend time on is your education. By learning how to read the charts, to plot trend lines on them and by identifying chart patterns and formations, you will over time develop a keen eye to quickly spot these patterns and formations without having to spend much time each week looking for new stocks to invest in. As they say; "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for life!". It is our hope that we teach you to fish with our course! Order the course now and start feeding yourself or visit our website and read more about the educational material we have to offer you!