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Underexposed - Canadian Stock Journal
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Underexposed - Canadian Stock Journal

  #41 (permalink)
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I look at charts differently. Firstly I rely on price action. I have slowly evolved away from using any indicators. In my view indicators are manipulation of price and volume data to give a visually pleasing view of what price has done in the past. Price has to move first before an indicator moves, so I figured I might as well just watch price.

Here is how I look at TCM;
Price had been in a steady decline since September. On Dec. 19 price made a new low but with a bullish candlestick on above average volume.
On Dec 31 price made a higher low and on Jan. 3rd a higher swing high.
Now Im watching.
On Jan 9 there was a higher swing low and I am planning to initiate a position.
The plan was to enter if price trades above the Jan 9 high.
It did that on Jan. 14 with a violent gap up. I got my fill at 2.75.
Since then I have had no reason to sell as the price has been making higher lows.
Friday there was a couple attempts to break 3.30; both failed but buyers supported the price above 3.10.
I agree there is resistance at the3.30 area and also around 3.60
Well see what Monday brings.

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It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
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  #42 (permalink)
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Hi DD


Quoting 
In my view indicators are manipulation of price and volume data to give a visually pleasing view of what price has done in the past. Price has to move first before an indicator moves, so I figured I might as well just watch price.

Like I said, there ain't just one way to skin this cat. The fact that I developed my method around indicators does not mean some other way is not equally as valid.

So we shall see how things play out. One thing is...that we see resistances and probably supports alike. I agree that $3.60ish is a secondary resistance...I personally see $3.25 as being the stronger one of the two. and there are several other mini-resistances before this stock is really free...that would happen if the stock breaches the wall of China at $4.45

It will be an interesting watch for me.

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  #43 (permalink)
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Underexposed View Post
Yes I do have a method, I developed it over 20 years of playing around with charts. Then when I "thought" I knew what I was doing I began trading for real a little over 12 years ago....then I retired with investment income was my sole income....still is!!!

I thought this was easy money...then came the crash of 2008-2009 and I lost 45% of my holdings....what a lesson!!!

Sounds like we have a bit in common. I've been at it a bit longer (probably made more mistakes), It was the crash of 2000/2001 that woke me up just after I retired; I didn't sell my Nortel because I didn't want to pay capital gains tax. When I did sell I didn't have many capitl gains to worry about. That was my Aha moment. It came down to focusing on protecting my capital rather than making money. Can't make any money when you run out of capital.

I was mainly out of the market in 2008 relying on TA. Smart or lucky I don't know but I still have my capital and have been increasing it since then.

It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
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  #44 (permalink)
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Picking a Canadian Bank Stock

Well I did a performance comparison similar to what I did in Post #6 of this journal

the results showed 4 banks that showed the best potential contenders. Actually any of the big five (ScotiaBank was eliminated here) are pretty solid performers. I look at what happened during the financial crisis of 2008-2009 for guidance.

There was not one Canadian bank or financial institution that had to shut down...no matter how big or how small they all survived. You cannot say that for American or European financial institutions...with their bogus derivative paper many fell or were seriously dealt a blow.

Every Canadian bank had a similar story but I will use the TD Bank to illustrate this

Stock Market Quotes | Stock Market Charts and Graphs

First of all, note the quick recovery following the crash of 2008-2009...in less than a year the stock rose back to its previous share price....Hover your cursor over the "D" in the chart....you will find the dividends INCREASING through the crisis period...not declining and they continue to increase with time. Finally note the "S" at the end...hover over that and you will find there was a 2:1 FORWARD split in the stocks so while this stock may appear to be an under performer versus other Canadian bank stocks ...up to a little while ago, before the split the stock was worth about $100/share.

Compare that stock to the American bank - Bank of America [NYSE:BAC]

Stock Market Quotes | Stock Market Charts and Graphs

this bank lost almost 90% of its value and 5 years later it still has not recovered to more than 1/2 its previous value. Hover over the "D" and you find a dividend payout of $0.64/quarter before the crash and 5 years later it is a measly $0.01/quarter...a shadow of its former self.

If I were to look at an American bank it would probably be Wells Fargo [NYSE:WFC] It has shown a better recover than BAC but only recently has it regained its former dividend rate

SO....my four contenders for a Canadian Bank Stock are: ( I'll show a link to their quarterly financials)

1. Toronto Dominion Bank [TSX:TD]

Stock Market Quotes | Company Financials, Financial Information

Short term debt: Nil ............................ Long term debt: about $8 Billion
Net Income: About $1.6 Billion

2. Royal Bank of Canada [TSX:RY]

Stock Market Quotes | Company Financials, Financial Information

Short term debt: $47 Billion ................ Long term debt: about $8 Billion
Net Income: About $2.0 Billion

3. Canadian Imperial Bank Of Commerce [TSX:CM]

[http://web.tmxmoney.com/financials.php?qm_page=17784&qm_symbol=CM[/URL]

Short term debt: $13 Billion* ................ Long term debt: about $5.8 Billion*
Net Income: About $0.9 Billion

*Short term debt is decreasing but Long term debt is increasing

4. Bank of Montreal [TSX:BMO]

Stock Market Quotes | Company Financials, Financial Information

Short term debt: NIL ................ Long term debt: about $4.4 Billion
Net Income: About $1.0 Billion


I like stocks with less debt...Both BMO and TD have no short term debt and about the same Long term debt. CM has lots of debt...RY has the most income but the highest debt


On this basis I will limit my TA to the Toronto Dominion Bank [TSX:TD] and the Bank of Montreal [TSX:BMO]

I will do that in my next post.

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  #45 (permalink)
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ok it is 9:00am MST and the markets have been been open for 2 hours now.

LUN.TO was tested AGAIN with low volume for less than a minute at $5.12 but I will choose to ignore such a weak test...it almost seems to be a support level.

Gold is fired up again being up to $1336/oz so I expect a decent day today.

I have finished my evaluation of bank stocks and will present the TA in the next post but I will state that as of 9:10MST

I will place a limit order to buy 400 shares of Toronto Dominion Bank [TSX:TD] at $49.47/share

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  #46 (permalink)
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My Bank Stock TA

Well there was no problem adding TD stock to my portfolio on this site (actually I did it for real too.)

It was not an easy decision between Bank of Montreal [BMO.TO] and Toronto Dominion Bank [TD.TO]. Both of these stocks are pretty good buys...but I must select one only so this is how I did it:

P&F charts

I use these charts for an overall look at the price performance....they are pretty old school but I find that they show macro resistance/support levels very well. here is a side by side comparision of the two companies

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I give advantage to TD here...a clear resistance at $50.00 with rising columns which defines a bullish ascending triangle. We are very close to the apex...there is a chance to break downward from here but statistically this is a bullish formation. On the other hand BOM is bearish with a negative resistance diagonal line.... you will see in the upper left side of the chart for BMO shows a "Low Pole Reversal" alert this is because of the recent rise and is moderately bullish but it is an alert...to be taken with a grain of salt...that sloping resistance bugs me.

My trigger chart

I use this chart for buying and selling. I am not really using this properly right now but I want to fill my fantasy portfolio. NORMALLY I like to make decisions when the Bollies are tight and as you can see that is not so right now.

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Both of these charts are similar in that they both fell hard in mid-January and recovered strong in February....this severely influenced the shape of the Bollies...they are not tightening but going in a huge tunnel.

NOTE the minor resistance that did not show up in the P&F chart for BMO...I think that will potentially cause that rise for the past month to fail at that point.....TD shows the resistance carrying over from the P&F chart at $50. The difference for me is that the P&F chart shows bull for TD and Bear for BMO...so I think this is stronger for BMO.

Does this mean it is over for both banks....no...I think that their respective resistances will be hard to pass and BMO in particular will retreat and go sideways for a while as the price consolidation continues. TD on the other hand may retreat a little then burst the resistance.

Not that all major movements in both companies take place when the BBwidth is about 3 for both stocks....the BBwidth is much to high right now for both...so we won't see a major movement in the near future IMHO.

My Sentiment Chart

When deciding whether there is enough interest to move forward or back I use this stock chart....especially when approaching a resistance or support.

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the Chaikin Money Flow certainly favours BMO...I like putting this indicator behind the share price (dotted line).....it makes the relationship much clearer. Aside that the TD bank CMF is mired in the mud for much of the last 6 months it is kinda moving contrary during this time. the BMO seems to track the CMF with a lag of a few months...on this indicator it is bullish for BMO and certainly bearish for TD

The RSI and ADX DI/- are basically acting the same Mildly bullish

The Ichimoku chart

I think this means "at one glance" or something close to that. It gives an excellent snapshot of the state of the union. The clouds portend the future with the green clouds being a little better than red ones....but they are like molasses when the price is inside them (the borders up and down are resistance and supports.

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The BMO chart is certainly much more choppy...crossing and recrossing the clouds. You can see how in the TD chart the borders of the clouds act as supports and I like the cloud formation in the TD chart...green and constantly rising.

The OnBal Vol is certainly in BMO's favour but the TD is not bad either and the CCI is almost identical in both charts.

Conclusion

It was not a clear cut choice though other than the CMF and OnBal Vol the TD charts were better for me.

Both are solid banks and well do well but I fell back on one more Fundamental piece of information.

Canadian banks are heavily criticized for being relatively small internationally. I don't think they can merge within Canada so they look for access to other markets.

26% of TD bank's income comes from the USA...they have a solid foothold buying many smaller banks in the USA since 2008. Bank of Montreal has very little presence in the USA other than in Chicago, I think.

So the TA and stronger expansion outside Canada leas me to choose Toronto Dominion Bank [TSX:TD} for my financial institution in this portfolio.

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  #47 (permalink)
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Problems with MEI.V

Well that trade has not turned out as planned....I purchased it at $2.75 and it is sliding hard to about $2.45 so far

Again in an effort to fill this portfolio quickly I purchased at the top of a run not the beginning. HOWEVER, I still like the company fundamentally.

Oil Futures are taking a bit of a beating and any time you are dealing with a commodity stock....you have to pay attention to its commodity

Futures Crude Oil Chart Hourly

I rarely sell a stock outright whether it is for gain or loss....the reason is that every time I do that the stock climbs ... sometimes I think someone should shadow my sales and buy instead

I don't like the emotion involved when really pulling the trigger....So I set a Limit Stock loss order...this gives the stock a chance for the stock to recover but takes the emotion out of bailing out too early.

You can see that I have done this already with LUN.TO if you look at my pending orders table back in POST #31
So far the price of LUN.TO has touched the level I set for selling twice for less than a minute each time on low volume so I am choosing to ignore these events as triggering my stop loss....who knows they may have triggered in real life...but MY Thread/MY RULES so I don't think they would have.

Well I will do the same for Manitok Energy [MEI.V]

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Yes, in looking back I broke several of my "rules" in buying this....

1. I purchased it in what I thought was the middle of a run (turned out to be the end of a run).
2. I ignored the fact that the stock price was above the upper bollie for 5 successive days so it was due for a pullback...but what a pullback {sigh}

now it is in consolidation and as per usual it has fallen back to its 20day moving average, where it should oscillate around it until the BBwidth falls to 8 to 10. I can see a fairly good support at $2.40...hopefully it will hold.

I don't want to set my Limit stop Loss there as I am pretty sure it will be challenged and a spike will trip the order.

So I will set a LIMIT STOP LOSS with an upper value of $2.35 and a lower value of $2.30

Of course a day trade would not think of taking such a loss....but I am thinking long term and this is a decent company...so I will take this risk.

As a side comment...say I had bought this stock at $2.30 on about Jan 8....well $2.80 would have given me a $0.50 or 20% profit in 6 months...In truth I probably would not have sold it there basically because I usually hold for longer times.....BUT IF I wanted to do a swing trade on this then I would have looked at the Slow Sto...see how it leads a fall, then the MACD reversing on Feb 20...and the BBwidth looking like it wanted to reverse...then I would have set a limit stop Loss and probably got out for about $2.70 or so.

But in getting into this trade I am looking for a long term trade...not a swing trade.

So we shall see if my Stop loss plans for MEI work out...if the stock continues its fall I am out of there but I like the company as I said so it would go to a watch list for the future.

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  #48 (permalink)
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almost lost MEI.V

well the price on this stock fell to $2.36 only one cent above my Stop-Loss upper level.

Tomorrow will be interesting to see if it will rebound....it closed at $2.38 so I have 3 cents above my stop-loss at the close...tomorrow will be interesting.

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Buying a Healthcare Services stock

Well I have almost completed my initial portfolio. I have $30,000 left to spend and will purchase 2 more stocks with it, $15,000 each.

I went through my normal procedure and think I have found a good one.

Nordion Inc. [TSX:NDN]

here is the Balance Sheet where it shows a very stable long and short term debt.

Stock Market Quotes | Company Financials, Financial Information

Income Statement show the last 2 quarters making a positive net revenue after a money losing begining to the year

Stock Market Quotes | Company Financials, Financial Information

The forecast for 2014 is encouraging and probably is what is spurring the current share price movement.

Stock Market Quotes | Stock Market Quotes and Symbols

Technical Analysis

Point & Figure Analysis


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This is an interesting chart....You can see it is approaching a huge resistance right now at $11.10. This is a major resistance and passing this one (if you look at a coarse chart) would set a strong support at $11.10 and then we would be looking at pre-2008 prices with a resistance line at $12.50. The current support is around $10.50.

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I really like this chart...I am not trying to buy at the top of a run....here we are jumping in at the start of a new run. The Slow Sto has been pegged over 80 for months. The MACD has fallen but looks ready to turn and the BBWidth right where one would expect to see a major price event to happen and it is showing the tiniest of upticks.

The price traveled in a tight channel since the beginning of the year and now has broken above the upper resistance just now.

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I like this chart too....the CMF overlay is solidly green and the RSI and ADX DI+/- look to be mildly bullish in that it appears to be turning a positive slope

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There is nothing bearish in any parts of the above chart

Conclusion

I am putting a limit buy order for 1500 shares @ $10.90 for the opening bell for Feb 27

I believe this chart will seriously challenge the $11.10 resistance and passing it would be a good thing

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well I filled my order in the first few mins of the trading day at $10.90....I could have got Nordion at $10.80 as it turned out but It will recover,,,,only one more stock to fill my portfolio,,,not sure what sector yet though

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