Stockhouse.com: Taking it to the street
Latest Broadcasts
V.ARD
Technology-Internet
T.FR
Natural Resources
V.AIX
Natural Resources.
OMCY
Internet/Technology
V.KTN
Natural Resources, Metals and Mining
T.ND
Natural Resources
An excellent place to start your search for new investments!
add to favorites print

Equinox Minerals (EQN) stock sinks on a setback.

Equity investors in the U.S. appear to have returned from their long weekend in a positive mood, with markets rebounding moderately this morning. In the last ten days, the RSI indicators for both the Dow Industrials (US30 CFD) and S&P 500 (SPX500 CFD) had been in oversold territory (below 30) a sign that tends to suggest oversold markets due for a bounce.

With these indices trading well below their January/March lows, however, these gains appear to be more of a relief rally within a bear trend rather than the start of a significant recovery. To signal a positive turn, resistance would need to be overcome near 11,750 for the Dow Industrials, or 1,325 for the S&P 500. With quarterly earnings season approaching, at this point, there remains a risk that U.S. markets could decline over the coming months to retest their 2006 lows near 10,680 for the Dow Industrials and 1,225 for the S&P 500.

It is possible that some of the lift in equities may be due to a correction in energy and agricultural commodity prices, which could be easing inflationary expectations a bit. Crude oil and natural gas, for example, have declined by 2.8% and 3.2%, respectively, while corn has fallen 3.8%, wheat has declined 2.9%, soybeans have dipped 2.4%, and rough rice has dropped 1.7%. With crude oil holding above $140/bbl, natural gas still above $13/mcf, corn just under $7.50/bushel and wheat still well above $8.50/bushel, this decline appears to be more of a normal correction on profit taking within the context of longer-term uptrends. Note that a previous measured objective near $147.50 for crude oil remains intact.

These short-term commodity price declines, however, appear to be impacting resource-weighted Canadian equity markets. Today, the S&P/TSX Composite appears to be testing 14,000, a key technical level, with additional support possible at its 200-day average of 13,865, or closer to 13,800. The S&P/TSX 60 Index (Toronto60 CFD), meanwhile, appears to be holding well above the key 815 level following a successful test of that and the 200-day average near 814 last week.     

Canadian share update: Equinox sinks on a setback

Equinox Minerals (TSX: T.EQN, Stock Forum) fell 10.7% this morning after the company announced that a fire at its Lumwana Project in Zambia caused damage to a power transformer and a substation. Because of this, the company now expects the completion and handover of the project to be delayed. While this may be viewed by some investors as a significant setback, investors should note that once the uncertainties surrounding the timing and cost of the delay are resolved, this event could be quickly discounted by the Street. 

Upcoming educational webinars

In the coming months, Colin Cieszynski will be presenting a series of free webinars on trading for accredited investors from coast to coast. 

Date                Time                Topic                                      

July 22             7:30 pm ET      Developing a Trading Strategy 1:
                                                What Kind of Trader Are You?

For more information on these and additional CMC Markets seminars, please go to CMC Markets Seminar Registration Page at http://www.cmcmarkets.ca/en/content/education/free_seminars.do

This commentary is based upon technical analysis. Technical analysis is the study of price and volume and the interpretation of trading patterns associated with such studies in an attempt to project future price movements. Technical analysis does not consider any of the fundamentals of an underlying company, and as such is inherently uncertain and should not be the only factor considered by an investor in making an investment decision. 

This commentary is provided for informational and educational purposes only. Nothing contained in this commentary is intended as investment advice or a recommendation or solicitation to buy or sell. All opinions expressed are current as of the date of publication and subject to change without notice.

CFDs and FX are highly speculative and can involve a high degree of risk. Investors in CFDs and FX should be prepared for the risk of losing their entire investment and losing further amounts. Trading accounts are available to Accredited Investors only. CMC Markets will not open accounts except in jurisdictions in which it is registered or exempt from registration. CMC Markets is an execution only dealer and does not provide investment advice or recommendations regarding the purchase or sale of any securities. Investors are responsible for their investment decisions. CMC Markets will not determine an investor’s general investment needs and objectives or the suitability of a proposed purchase or sale of a security. CFDs are distributed in Canada by CMC Markets Canada Inc. as dealer and agent of CMC Markets UK plc. CMC Markets Canada Inc. is a Member of the Investment Industry Regulatory Organization of Canada and Member CIPF. Contact us for further details.

Note that any references to CFD prices or price changes are sourced from CMC Markets' proprietary trading system Marketmaker™. CFD and FX Accounts are available to accredited investors only.

 Copyright 2008, CMC Markets. All rights reserved.

ABOUT THE AUTHOR
Colin Cieszynski, CMC Markets
Colin Cieszynski,CFA, CMT  is a Market Analyst and Manager of Education with CMC Markets Canada. Currently, Colin provides daily technical commentary on North American equity markets and selected commodities. Colin joined CMC Markets from Canaccord Capital, where he provided market commentary to individual investors for the last ten years and daily technical notes since 2001.

Colin has completed both the Chartered Financial Analyst and Chartered Market Technician programs. He is a member of the Market Technicians Association, the Canadian Society of Technical Analysts, the CFA Institute, the Toronto CFA Society and the Prospectors and Developers Association of Canada. 

 

About CMC Markets

CMC Markets is Canada’s only online CFD provider and its affiliate, CMC Markets UK plc, was the first company in the world to offer online FX trading. CMC Markets UK plc has been offering CFDs and FX to Canadian traders through the services of CMC Markets since 2005.

Founded in 1989, CMC Group has 22 offices worldwide, including Toronto and Vancouver, employs in excess of 1,000 staff and represents clients in over 70 countries. Between November 2006 and October 2007, CMC Group handled over 16.2 million trades with a total value of over US $1.1 trillion, across the full product range. In December 2007, Goldman Sachs acquired a 10% stake in the CMC Group.

 
print
 
Stockhouse Conflict and Disclosure Policy:

Stockgroup Media Inc., owners and operators of Stockhouse.com, has established the following rules to ensure that there is no appearance of impropriety on the part of any Stockhouse Editorial writers ("Writers"). The content of Stockhouse Editorial articles (the "Articles") are the opinion of the Writer and any reliance on the content of these articles is at your sole risk. Our Writers are not registered investment advisors. You should not make any kind of investment decision in relation to Articles or stocks discussed in them without obtaining advice from a registered investment advisor.

Facts relied upon by our Writers are generally provided by the subject companies or gathered by our Writers from other public and/or private sources. These facts may be in error and if so, the opinions of our Writers may be materially different.

Writers may own, buy, or sell shares in public companies mentioned in their Articles, but in the Article they must prominently state their ownership position. Thus, a conflict may exist. Writers are not permitted to write Articles that attempt to benefit persons connected to the Writer, such as family or friends, except where disclosure is made in the same way as if the Writer him/herself owns stock.

Writers cannot solicit, accept, or agree to receive anything of value given or paid with the intent of influencing their Articles.

Stockhouse notifies each Writer about these rules, and we rely on the integrity of our Writers to ensure that our rules are followed.

 
 
 
 
 
Today's Feature  
 
Arco Resources Corp
New Name, New Country, New Commodity, NEW OPPORTUNITY!

Arco Resources Corp. is a dynamic junior mining company traded on the TSX Venture Exchange (TSX-V:ARR) and the Frankfurt Stock Exchange (FSE: MJ7). Arco's strategic focus is on exploration and development of Gold, Silver and Polymetallic properties in southwestern Mexico...