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Three top stock picks from Getting Technical’s Bill Carrigan

Bill Carrigan.

Kevin Van Paassen/The Globe and Mail

Bill Carrigan is a technical analyst at Getting Technical Info Services. His focus is on technical analysis.

Top Picks:

Talisman Energy Inc. (Disclosure – direct personal ownership)

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  • A lagging energy company that is breaking up out of a long 20-month base on increased volume.

Medical Facilities Corp. (Disclosure – direct personal ownership)

  • Some exposure to the health care sector which is a long term dominant theme.
  • A linear up trend supported by a series of new 52-week highs.

iShares S&P/TSX SmallCap Index Fund (Disclosure no direct or indirect relationship)

  • A diversified small company basket – technology, industrial, metals and biotechnology.
  • A late-cycle play on a growing economy.
  • Just breaking up and out of a bullish falling wedge.

Past Picks: December 28, 2012

Bombardier Inc.
Then: $3.73
Now: $5.33
Total return: +45.26 per cent

iShares MSCI Japan Index Fund
Then: $9.67
Now: $11.97
Total return: +24.26 per cent

iShares S&P Global Timber & Forestry Index Fund
Then: $44.56
Now: $51.14
Total return: +16.11 per cent

Total return average: +28.54 per cent

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Market outlook:

The Big Mistake: Too many investors are fearful of a stock market crash and are trying to "time" the markets. Better to enjoy the current bull market and remain fully invested.

Bull: A long period of time when prices in the market are generally increasing.

Bear: A long period of time when prices in the market are generally declining. It is often measured by a percentage decline of more than 20 per cent.

Most modern bull markets (since 1974) are quite long with an average length of about 2360 days.

As we can see at August, 2013, the current day count is 1586, so the current bull could still run for another 800 days.

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Since the lows of 1974 (14,000 days ago) the equity markets have been advancing 12,000 days or about 85 per cent of the time.

Alternate Strategy: Remain fully invested and employ natural sector rotation into your portfolio strategy. The normal sector rotation order is:

  • Leading Stock Sectors - Financial, Utilities & Telecom
  • Coincident Stock Sectors - Consumer, Health Care, Industrial & Technology
  • Lagging Stock Sectors - Energy & Materials

No top in sight yet as at the close Oct. 28, 2013. At least three Canadian banks printed new 52-week highs along with the iShares CDN S&P/TSX SmallCap Index Fund (XCS) and the U.S.-traded iShares DJ Transportation Average Index Fund (IYT).

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