Tip: Watch National Bank of Canada this week. Particularily April 14 calls. About 20 contracts traded all of January, but today volume was > 1000 contracts @ 0.45 *very attractive* but you won't get that at the open tomorrow. Reason banks are on the up is because of the low risk of reduction of interest rates owing to comments from Mr. Edward Greenspan, but more importantly to the economic numbers in Canada. With low interest rates, combined with low inflation and good economic growth, this contributes to climbing stock prices. The banks are the first to rise on because lower interest rates means better income for banks. Rates aren't likely to to decline anymore, as they don't need to but keep them at these levels, and we'll see a raging bull for 1997.
Also the banks are beginning to discuss changes to merger rules. This also may contribute to the price of the bank stocks, provided the talks go well.
Take home message: I'm buying Canadian bank stocks and National bank meeting my criteria PREMT (stands for price, ratings (brokerage firms), earnings, momentum, timing). |
