Jeff Parent is portfolio manager at Quadrexx Asset Management. His focus is on technical analysis.
All three of the top picks share a similar reversal pattern. They have all bottomed out after multi-month declines. Transcontinental's recent rally is supported by improving fundamentals and an increasing dividend. It will see some resistance around $12.60; set a stop at $9.60.
Canaccord Financial Inc.
With the potential for a turnaround in the earnings picture, Canaccord is being bought again after a decline that began almost two years ago. Momentum is strong and could bring this stock back to the $8 level. At $5.40, it will be time to exit.
Madalena Ventures Inc.
The chart is exhibiting a classic turnaround. There is a lot of potential on the upside but be careful of the position sizing. As a penny stock, there will be a lot of volatility. Volume is supporting the run from 20 cents to the current 30 cent range. If it breaks above 40 cents, it could go to 60 cents quickly. Sell below 25.
Past Picks: Dec. 02, 2011
Miranda Technologies Inc.
Total return: +93.07 per cent
Alliance Grain Traders Inc.
Total return: –38.31 per cent
Chemtrade Logistics Inc.
Total return: +20.40 per cent
Total return average: +25.05 per cent
The U.S. markets have had a nice run in the past four years, and barring a year-end selloff, will finish this year with double-digit gains. Working against a continuation of the run will be the presidential cycle, and an unresolved debt and deficit situation. We will be starting off the new year with larger than average cash positions and looking for opportunities in more predictable issues. Banks, both in the U.S. and Canada, are of interest to us.