The TSX is dislocated and expensive on 52-week relative price routines vs. S&P 500 (SPX), and has neutralized on direct price routines, says Ziad Jasani. He offers three scenarios this week and hosts a free webinar Saturday. See below.
Recorded: Monday April 30, 2018
Duration: 1:06:41
This implies that if my Scenario A is playing out (outlined here Monday), the TSX would rise at a slower pace than the S&P 500 unless Oil is exploding higher >$69.50 – then we can expect out-performance.
We maintain Hold decisions for longer-term investors while the TSX remains > 200-day average (15,625).
Swing-trading opportunities at the sector level we would consider build on are below (listed in order of importance):
Financials (XFN-T, ZEB-T)
• XFN-T > $37.21 or bounce off $36.85
• ZEB-T > $28.56 or > $28.83 or bounce off $28.56
Cannabis (HMMJ-T, WEED-T)
• HMMJ-T > $17.03 or bounce off $15.98 • WEED-T > $28.70 or > $30.40 or bounce off $26.19
Industrials (ZIN-T) • ZIN-T > $26.95 (50-day average) or bounce off $26.08
Technology (XIT-T)
• XIT-T > $17.81 or bounce off $17.46
Materials (XMA-T, XGD-T) – if Gold > $1,333
• XMA-T > $13.04 or > $13.31 or bounce off $12.97
• XGD-T > $12.08 or bounce off $11.62
Energy (XEG-T, ZEO-T) – if Oil > $68
• ZEO-T > $11 or bounce off $10.58 • XEG-T > $12.85 or bounce off $12.01
• NOTE: Oil and Energy equities are more likely to see a short-term cooling-off prior to the next potential bounce. Smaller Energy plays (ZEO-T) have gotten dislocated and cheap vs. the larger caps, suggesting the next bounce is led by the smaller energy plays; and/or they unwind at a slower pace.
If Oil holds above $68 and the 10-year U.S. Treasury yield stays below ~3.07% (and Canadian yields remain soft) we can consider opening swing trades on our Defensive Sectors:
Utilities (ZUT-T) • ZUT > $16.32 or > $16.57 or bounce off $16.11
Staples (XST-T) • XST-T > $53.43 or > $53.99 or bounce off $52.54
Telecom (BCE-T) • BCE-T > $55.34 or > $56.61 or bounce off $53.45
REITs (XRE-T, ZRE-T)
• ZRE-T = Hold > $20.83 | Strong Sell < $20.44 • XRE-T = Hold > $16.52 | Strong Sell < $16.33.
Please join my free Introductory Active Investing Workshop on Saturday, May 5, 2018 from 12 pm – 3 pm (EDT): Click here to register
View the Independent Investor Institute trading ideas and strategies videos here.
