by Ryan Lewenza, North American Investment Strategist, TD Wealth
November 4, 2013
Here are the highlights from TD Wealth's 'The Technical Take', Volume 8 Highlights:
ā¢ The S&P/TSX Composite Index (S&P/TSX) broke above a key technical resistance level of 12,900 in October. We view this breakout as an important event for the S&P/TSX, as we believe it is now in a new higher trading range. With the recent strength, the S&P/TSX is now technically overbought and we expect some nearterm backing and filling for the S&P/TSX; however, we are growing more bullish on the S&P/TSX.
ā¢ We have been bullish on the Canadian financials sector; however, we believe the sector is due to take a breather in the coming weeks. Given the recent strong gains and overbought condition, we could see some near-term profit taking.
ā¢ We continue to believe that the U.S. Federal Reserve`s (Fed) asset purchases are providing a significant boost to the equity markets, and with our expectations of the Fed ātaperā being pushed out until Q1/14, we see the potential for continued strength in U.S. equities. In the near-term, however, we see the potential for a pause in the rally and more likely, some short-term profit taking.
ā¢ Bearish investor sentiment has dropped to levels not seen since early 2012. Currently 17.6% of investors surveyed are bearish, which is well below the long-term average of 31%. Overall, investor sentiment is heavily skewed to the bullish camp, which could be foreshadowing a short-term pull back in the equity markets.
ā¢ In this weekās report, we highlight Corning Inc. (GLW-N) and Teck Resources Ltd. (TCK-T) as attractive buy candidates and recommend investors trim/sell International Business Machines Corp. (IBM-N).
You may read or download The Technical Take in its entirety in the slidedeck below:
