Hidden in the demise of the commodities are some gems in other industries. Companies in Aerospace, Biotech, packaging, insurance, and water purification just to name a few are working to transform their businesses and change investor outcomes from the common names in Canada. Some are well above consolidation, so I won't cover them here, but there are some nice stocks that look ready to move.
Onex Corp (OCX.TO) is at a critical point on the chart. OCX.TO is trying to break out to the upside. The relative strength shown in purple is at an important junction. If it can break out, it will maintain the uptrend. If it can't we'll probably see the price decline as the stock also has a downtrend on relative strength from the previous high. The MACD is making a lower high. But today is an important day. Onex closed up on higher volume as the price looks ready to test the old highs. The SCTR suggests this is very strong, but this needs to break out here.
Metro (MRU.TO) is pushing to higher highs here as well. Today it had a big candle that opened higher and closed near the lows on higher than average volume so that is not as bullish. The trend though has been a slow climb to the top right corner of the chart. As long as the relative strength holds up, this should be ok.
Knight Therapeutics (GUD.TO) seems to be setting up for a big move. After an initial thrust from the $5.75 level, Knight pushed up quickly to $10.00. After pulling back, Knight has been oscillating in a tighter pattern since the June low. Once again the relative strength in purple is on a gentle uptrend. If it could turn up and start to outperform, this stock has some room to run. The SCTR says the stock is behaving better than 90% of TSX listings, so perhaps it can start to run again. If it can't hold the uptrend line, that would be a bigger problem. The decline in volume over the last six months is starting to reach a low level so any large volume day would be a breakout on that downtrend. Perhaps that explosive volume will show up on a breakout in price as well.
A&W Revenue Royalties (AW/UN.TO) has been on a major run recently. It might have to pull back before a good entry, but it surged to new highs last week. This one trades very light volume, but that is a common problem on less popular stocks.
Norbord (NBD.TO) has traded in a channel for the last three years. The stock had a bearish day today where it took out yesterday's high and closed below the low after touching the trendline. The Relative strength needs to break out here. If this can start to make new highs in relative strength that will probably attract more investors. The MACD made the highest surge in momentum over the last 2 years. This is worth watching as the measurement for the expected move would be the channel width above the breakout level. So up around $39 for a target.
All of these stocks have a strong SCTR already. Some of them should move. A lot of the packaging stocks have strong charts. Winpak (WPK.TO), Cascades (CAS.TO), and CCL Industries (CCL/B.TO) have all been moving higher in the packaging industry.
Look through the strong SCTR's. There are some interesting stocks just breaking out. It can help you refocus on what is working. Martin Pring and I will be hosting a webinar tomorrow at 3 EST. Click on this link to register. Martin Pring's Market RoundUp Live.
Good trading,
Greg Schnell, CMT
