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Bill Carrigan.Kevin Van Paassen/The Globe and Mail

Bill Carrigan is a technical analyst with Getting Technical Info Service

Top picks

CAE Inc. (CAE-T)

$16.65 (Industrial Component). An overlooked play on exposure to military and commercial aerospace with positive relative performance versus the TSX Comp.

BMO Equal Weight Banks Index ETF (ZEB-T)

A basket of the big six Canadian banks. No bull market can operate without participation – or leadership – from the financial sector.

Major Drilling Group International Inc. (MDI-T)

A mining lagging bellwether and an overlooked beneficiary of a base metal recovery.

Past picks:

iShares S&P/TSX Capped Materials Index ETF (XMA-T)

Then: $10.92 Now: $13.15 +20.42 per cent Total return: +20.42 per cent

BMO S&P/TSX Equal Weight Industrials Index (ZIN-T)

Then: $18.25 Now: $20.09 +10.08 per cent Total Return: +10.69 per cent

CAE Inc. (CAE-T)

Then: $14.95 Now: $16.44 +9.97 per cent Total Return: +9.97 per cent

Market outlook:

Technical analysis gets into trouble when the art form migrates from the study of stocks, commodities and currencies and into the price forecasting of the major stock indices such as the S&P/TSX Composite, the S&P 500 or the NASDAQ Composite. Technical studies do not work because a major stock index is a basket of diverse sectors (such as financial, energy or consumer) that – for the most part – do not advance and decline at the same time. The great dot-com bust of 2000-2002 was a non-event if you owned financial and energy stocks.

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