Monday, October 02, 2006


It was a losing start to the week as traders stepped in during afternoon hours to bid down the market. The weakness was reflected in my Trade Ideas scan as the 8 picks selected covered a time span of 10 minutes (looking further down my scan output the buying looked a lot weaker than this, an 8 pick list from 2:30 ET would have taken 60 minutes to generate).

Top of the pile was TransCanada Corp (TRP), a gas utility. It appeared on the scan 27 times over the course of the day. It was clear of second placed Sun Life Financial (SLF), in the insurance sector, which appeared 22 times.

Only Manulife (MFC) and Sun Life (SLF) completed bullish crosses between their 50-day/20-day MA over the last 2 months. Metallica (MRB) and Eaton Vance (ETO) are working off recent bearish crosses in these averages.

One-year charts of these stocks holds limited appeal. Eaton Vance (ETO) looks to be shaping a handle in the $26-28 range following confirmation of its May-June double bottom; watch for move to $32-33, stops on loss of $26. Metallica (MRB) has seen a relative drop in volatility after huge swings in the first half of the year - maybe it is ready to rock and roll again? Use the 200-day MA as your protective stop. Trend traders could look the two income funds: AMF and VIN, with their 5.00% and 6.50% yields respectively (run a stop for the former on loss of $3.55 and the latter at around $5.70).

If you would like to try a full version of the Trade-Ideas software, follow this link for a free 7-day trial.