May 18, 2000
StockHouse News Desk
By David Poxon
Technical Analyst
Technical Analysis: CAE Poised For 40-50% Upside, QLT, Canfor Moving As Predicted
CAE has a very bullish technical picture and should move well above the old highs. In the short term, our predictions on Canfor and QLT have proven correct and they are still on track longer term.
Toronto, ONT, May 18 /SHfn/ -- Few stocks have as strong a medium strength wave ratio picture as CAE Inc. [T.CAE]. The current technical condition indicates that CAE should trade to significant new highs over the next few months.
The recent pullback has been very muted and this has created a very positive series of wave ratios. In different terms, the buy/sell force is very much on the bullish side. Based on the bullishness of this buy/sell force, I expect that CAE should trade to the $20.50-22 level.
The current TVAL elasticity readings are positive. The recent short term burst through the short term ALR boundary line is also indicating that the short term buying is coming back. Average wave size has been 11 days, with trend waves being +3 and counter trend waves being -3. This new up wave should continue for several more days, followed by some selling. At that point, investors should consider hopping on board.
Update On Canfor's Down Wave
We suggested in a previous report that Canfor [T.CFP] was in the process of rotating into a negative wave down. Over the past few weeks, this has begun to occur. The move back to the $15 level reversed the short term trend, so now we have entered a new medium strength down wave. This recent short term up wave is a good spot for investors to begin taking profits if they haven't already done so. I still expect that CFP will trade back down to the $12-13 level before entering into a new up wave.
Update Of QLT's Stealth Bullish Pattern
In a May 4 report (insert url for May 4 Technical Analysis on QLT )there were stealth bull readings on QLT Phototherapeutics [T.QLT] but I felt it was a touch early and it would be better to wait for a move back to the mid $70s. Well, QLT did exactly what I anticipated it would do and actually went slightly below. The picture however still remains very positive. The TVAL elasticity readings are quite bullish and all that is needed now for the short term buy/sell force to swing back to bullish is to have the stock jump to the $82.40 level. This would push the ALR Oscillator reading above 63 and this would be above the last trough ALR Oscillator reading. I continue to expect that QLT will make new highs later in the year and believe that right now it is very timely.
Dave Poxon, formerly a proprietary stock trader, is now president of an institutional research firm that provides proprietary technical research services to institutions with in excess of $100 million of assets under administration. He writes exclusively for StockHouse.ca and StockHouse.com. Click here for a description of his technical indicators.
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