Two S&P 500 stocks broke resistance and four stocks broke support.

Submitted By Don Vialoux

Technical action by S&P 500 Index stocks was quietly bearish yesterday. Two S&P 500 stocks broke resistance and four stocks broke support.

S&P 500 stocks breaking resistance

Stock Symbol Previous New

Trend Trend

McDonalds MCD Up Up

State Street STT Down Up

S&P 500 stocks breaking support

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BMC Software BMC Up Neutral

Leggett & Platt LEG Up Down

Office Max OMX Down Down

Travellers TRV Up Down

Technical action by TSX stocks also was quietly bearish. No TSX stocks broke resistance and two stocks broke support.

TSX stocks breaking support

Stock Symbol Previous New

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Southwestern Res. SWG Down Down

Canwest Global CGS Down Down

Inter-day Comments for Tuesday June 19^th

9:20 AM EDT: The Dow Jones Industrial Average and S&P 500 Index have found short term resistance at their June 1^st highs. On that day, the Dow reached an inter-day all time high at 13,692.00 and the S&P 500 Index reached an inter-day all time high at 1540.56. Short term momentum data for both indices (MACD, RSI) have rolled over from short term overbought levels.

Chart courtesy of StockCharts.com www.stockcharts.com

Alcan is in the spotlight again this morning. BHP Billiton is rumored to be interested in acquiring Alcan. Alcan’s share price already has a takeover premium following a hostile takeover bid by Alcoa.

Chart courtesy of StockCharts.com www.stockcharts.com

‘Tis the season for companies to release negative guidance prior to release of quarterly earnings! This morning, Best Buy gave a warning. Technically, BBY has a negative technical profile. The stock is in an intermediate downtrend. Today’s announcement will not help the technicals.

Chart courtesy of StockCharts.com www.stockcharts.com

Update: Leggett & Platt also gave a negative earnings warning.

Chart courtesy of StockCharts.com www.stockcharts.com

Bristol-Myers is expected to open stronger this morning following news that Plavix, its biggest drug will remain on patent. Technically, BMY remains in an intermediate uptrend. On Friday, the stock broke to a five year high.

Chart courtesy of StockCharts.com www.stockcharts.com

9:45 AM EDT: FP Trading Desk headline reads, “Golden Star Resources upgraded to hold on share weakness at UBS”. Following is a link to the report: http://communities.canada.com/nationalpost/blogs/tradingdesk/archive/2007/06/19/golden-star-resources-upgraded-to-hold-on-share-weakness-at-ubs.aspx

Golden Star has a positive technical profile with qualifications. Despite falling 33% from $5.61 in mid April to a recent low at $3.77, the stock remains in an intermediate uptrend. Recent weakness has taken the stock to the top of a previous trading range and to its 200 day moving average at $3.97 where the stock is finding support. MACD and RSI are oversold in the short term and are showing early signs of recovery. Golden Star has a period of seasonal strength from July to September. The stock appears to be in the early phases of an intermediate base building pattern.

Chart courtesy of StockCharts.com www.stockcharts.com

3:00 PM EDT: FP Trading Desk headline reads, “RBC points out its favourite junior gold stocks”. Following is a link to the report: http://communities.canada.com/nationalpost/blogs/tradingdesk/archive/2007/06/19/rbc-points-out-its-favourite-junior-gold-stocks.aspx

Many junior gold stocks are forming short term bottom and base building patterns. Most also have a pattern of seasonal strength between July and September. Canadian gold stocks have outperformed the price of gold in U.S. Dollars during the past three weeks, an encouraging technical signs. Historically, outperforming gold stocks suggests that investors have growing short term confidence in both gold and gold stocks. In addition, short term momentum indicators (MACD and RSI) for the TSX Gold Index recently have turned higher from oversold levels.

Chart courtesy of StockCharts.com www.stockcharts.com

ETF News

Horizon BetaPro launched two ETFs on the TSX Capped Energy Fund on Monday. Both are designed similar to their TSX 60 and TSX Financials products.

Daily performance is leveraged to two times
MER is 115 basis points
Bull and bear units are available

Symbols are:

Energy Bull + ETF: HEU

Energy Bear + ETF: HED

Look for leveraged gold ETFs to come to market next week.

Interesting Chart

U.S. long term interest rates are showing technical signs of resistance near the 5.25% level. MACD has rolled over from a short term overbought level.

Chart courtesy of StockCharts.com www.stockcharts.com

More On Possible News From The Biotech Sector

Lots of news will be released by the sector during the next six months! TheStreet.com recently released a report that highlights important “judgment days” for significant drugs that are expected to reach the final approval stage before the end of the year. Dates are approximate and subject to change by the Food and Drug Administration (FDA). Some drugs will receive approval and some will not. Additional news on approved drugs will be released at healthcare conferences later this year and in January.

Expected FDA Company Drug Indication

Decision Day

Now to June 30 Pfizer Celsentri HIV/AIDS

July 16 Neurochem Kiacta Amyloid Amyloidosis

July 21 DOR BioPharma OrBec Graft vs Host Disease

(GVHD)

July 26 Sanofi-Aventis Zimulti Obesity

July 29 KV Pharmaceutical Evarnist Menopause

August 1 POZEN Trexima Migraine Headaches

August 13 Indevus Pharma Sanctura XR Overactive Bladder

August 15 GPC Biotech Satraplatin Prostate Cancer

August 26 IDM Pharma Junovan Bone Cancer

August 30 Tercica Somatuline Acromegaly

Autogel

September 6 Omrix Pharma Thrombin Hemostasis

October 7 Theravance Televancin Skin Infections

October 15 Elan/Biogen Tysabri Crohn’s Disease

October 18 ZymoGenetics rThrombin Hemostasis

October 18 Cardiome Pharma Vernakalant Dysrhythmia

Hydrocloride (Arrhythmia)

October 20 Pfizer Lyrica Fibromyalgia

October 21 Genzyme Renvela End-Stage Renal

Disease (ESRD)

November 1 Forest Laboratories Nebivolol Hypertension

(Systemic)

November 18 Basilea Pharma Ceftobiprole Skin infections

November 24 BioMarin Pharma Kuvan PKU

December 31 Pharmacyclics Xcytrin Brain Cancer

Iain Fraser’s Column

We will, in this column, continue our remarks on selling stocks. To put the whole thing into current perspective, some value judgments have to be made. The first one is to recognize that the current bull market is now well into its fifth year. Also, the major indices both here and in New York have approximately doubled. Many of our early top picks have gone up five to ten times. The practical consideration is whether to take some money off the table in those stocks that have more than doubled in this bull market. Also, what about those stocks that have gone up about five to ten times? We think it is practical to cash in on some of your profits; such a move is not necessarily making a judgment on the merits of the company, but it is rather a personal management judgment. One of our best top picks in early 2003 was Inmet at $6.40; the company is in the mining business and mainly cop per mining. The price of the stock today is 15 times what it was in ’03. If a person were to sell just 10% of this stock at this time, the remaining 90% would be free. How could one disagree with such a judgment? Our function is to rate stocks; our view is that any stock over 1.30 should not be in the portfolio. Our rating system is that anything 1.30, or more, is either market value or overvalued, anything under 1.30 is undervalued. If the rating is between 0.90 and 1.10 the stock is substantially undervalued; if a stock has a rating between 0.70 and 0.90 it is excessively undervalued. And if a stock is under 0.70 it is super undervalued, and we have had three of these in the past seven months. But also of course, with the market up as much as it is, there are now more and more stocks that have a rating over 1.30, and in our view they should not be in the portfolio. Also bear in mind that some industries have a long history of not making consistent profits; two of these ar e forest products and airlines. We have shown the long term (5 year) chart for Abitibi ($3.25) which has been in trouble for many years. If we had shown a long term chart for almost any airline stock, it would show that in the long term, airlines are not a good investment. As the weeks go by during this summer we will be on the look out for Canadian stocks that were undervalued, but have now moved up to a point where they cease to be in this category.