That's what friends have been asking since my recent posts about selling Encana (ECA) on September 30 and Research In Motion (RIM) on October 13.
Well, the little birdies have been predicting an upturn for Canadian banks for the past couple of months. There is a near unanimous consensus that the banks have their troubles behind them and will report strong results for the next several quarters. Most analysts predict that the banks will begin raising dividends as early as year end.
So, decision made…going to buy the banks. Which one(s) to buy? That’s the question. For the answer I turned to the Interactive Charts of Yahoo! Finance. I had a look at one year charts for BMO, BNS, CIBC, National and RBC. Why not TD? Because I already hold TD and have for some time as mentioned in my post Canadian Banks - Buy 'em and Hold 'em. Why National when it’s not one of the big five? Because it’s often a top pick by BNN analysts and many expect it to outperform the others and be the first to increase dividends.
To the charts I added Technical Indicators for 50, 100 and 200 day simple moving averages. By doing this I discovered that that BMO and RBC were trading at or below their moving averages. On the other hand, BNS, CIBC and National were trading well above which possibly indicates they have already begun the assent to new levels so there may be less upside over the next few months.
Based on this simplistic research, I divided my Encana and RIM money in two and placed buy orders for both BMO and RBC. On October 13 I bought these two banks.
This week I sold Scorpio Mining (SPM) on Monday and Lundin Mining (LUN) on Tuesday. As mentioned, Scorpio was my first ever double and I picked up a very nice 37% gain on Lundin. Anxious to keep the money in play I quickly bought Grande Cache Coal (GCE) and Western Coal (WTN). Why the coal miners? Again, the little birdies are predicting that the demand for coal will outstrip supply in the next 12 to 18 months as China builds another coal fired something or other every couple of weeks.
I have great hopes for my four new stocks over the next six to twelve months.
IMPORTANT REMINDER
Nothing on this site should ever be considered to be advice, research or a suggestion or invitation to buy or sell any securities. Every investor should do their own research and consult their own finance guy. See full DISCLAIMER.
Well, the little birdies have been predicting an upturn for Canadian banks for the past couple of months. There is a near unanimous consensus that the banks have their troubles behind them and will report strong results for the next several quarters. Most analysts predict that the banks will begin raising dividends as early as year end.
So, decision made…going to buy the banks. Which one(s) to buy? That’s the question. For the answer I turned to the Interactive Charts of Yahoo! Finance. I had a look at one year charts for BMO, BNS, CIBC, National and RBC. Why not TD? Because I already hold TD and have for some time as mentioned in my post Canadian Banks - Buy 'em and Hold 'em. Why National when it’s not one of the big five? Because it’s often a top pick by BNN analysts and many expect it to outperform the others and be the first to increase dividends.
To the charts I added Technical Indicators for 50, 100 and 200 day simple moving averages. By doing this I discovered that that BMO and RBC were trading at or below their moving averages. On the other hand, BNS, CIBC and National were trading well above which possibly indicates they have already begun the assent to new levels so there may be less upside over the next few months.
Based on this simplistic research, I divided my Encana and RIM money in two and placed buy orders for both BMO and RBC. On October 13 I bought these two banks.
This week I sold Scorpio Mining (SPM) on Monday and Lundin Mining (LUN) on Tuesday. As mentioned, Scorpio was my first ever double and I picked up a very nice 37% gain on Lundin. Anxious to keep the money in play I quickly bought Grande Cache Coal (GCE) and Western Coal (WTN). Why the coal miners? Again, the little birdies are predicting that the demand for coal will outstrip supply in the next 12 to 18 months as China builds another coal fired something or other every couple of weeks.
I have great hopes for my four new stocks over the next six to twelve months.
IMPORTANT REMINDER
Nothing on this site should ever be considered to be advice, research or a suggestion or invitation to buy or sell any securities. Every investor should do their own research and consult their own finance guy. See full DISCLAIMER.
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