Toy investors seem to be rattled. This is because of Toys “R” Us going bankrupt. Also, a major distribution channel for Mattel and this company is being taken away, which has caused some problems. Technically, the chart shows we haven’t quite broken down through the right shoulder yet, but if we do, that is a bad sign. Although we are in the seasonal period for retail stocks, if the technicals are not living up to it, you may want to pass on it. Look for it to show a little more strength, but if it falls below that neckline, he would be exiting.
A short-seller dropped the stock price, and the battling back-and-forth has created problems. The sector is doing really well. This has been trading in a range recently. They are coming on with earnings next week, and will clarify their positions. We are at the top end of the trading range in the sector’s seasonal period. Wait until the earnings actually come out. If it breaks out in the top end of the range, that is a very positive sign.
Canadian banks are really interesting in that after their good August earnings, they stumbled. They’ve now picked up and have rocketed. Canadian banks typically do well from Oct 10 into December. Chart shows this was in a channel, but has now broken out, which is very positive. He wouldn’t be surprised to see it go back to the high it had earlier in the year.
If interest rates move up and don’t have the growth, these are not going to participate. Chart is showing an overall downtrend, which hasn’t been broken yet. Until it demonstrates more growth potential, he would wait. Once it breaks the downward trend line, it indicates investors are switching their conception.
(A Top Pick July 31/17. Down 3%.) Tends to do well in the summer because it is a consumer staple stock. Investors are looking for dividends and more stable earnings. This year we’ve seen some excitement in the stock market in the summer, so investors haven’t been attracted. At the same time expectations on interest rates have been moving up, so bond proxies haven’t performed well. 3.2% dividend yield.
Gold seasonality is really from the end of July to the beginning of October, but it can also do well from December into February. There is an interest rate increase possibility for December in the US. If they do, it hurts gold. Has seen gold perform poorly in December until the end of December because of the tendency for the Fed to raise rates at the end of the year. Wait until the end of December before actually adding, and then let it run into Jan/Feb.
There was lots of press about them going to go under. While the global economy is going well, even if there is stuff hidden underneath the carpets, it is probably not going to come out. If you believe the global economy is doing well, then you would expect this company to come out and do okay. Chart shows the stock is trading in a channel and is currently at the bottom of the channel, which is good right now.
There has been heightened interest in renewable energy. Chart shows a pattern of consolidation through 2016, and now there is one for 2017 as well. We are close to the top of the channel, so if it breaks above that level that is a positive sign. Wait for this to break above the current level of around $45.
Market. We are just stepping into the time where stocks do well over the next 6 months. They’ve done well over the last 6 months also, but can still do well. The new highs on the TSX, S&P 500, NASDAQ and the Dow today is a bullish signal. There has been an underpinning of some key sectors in the market. Technology has led the market for so long, and continues to do well, that is a good sign for the market. We’ve also seen support from the financials. If financials participate in a rally, that is a good thing, because it is showing we are perceiving the economy as doing well. However, energy and materials are still down at around 9% from the previous peak, but there’s still time for them to participate. The TSX has done well versus the US, over the last couple of months, but from this time in October and into November and December, it is usually the US that does well, about 73% of the time from 1950 to 2016. That is because of the sectors. Oil tends not to do well in Nov/Dec and gold tends to be weak in October.