Canada Market Round-Up

The benchmark S&P/TSX Venture Composite Index (TSX: ^TSXV) started the last week on a negative note. The S&P/TSX Venture composite index declined by 8.59 points 1.34% to 631.79 for the week ending on June 24, 2022. The weekly chart indicates that the index prices are trading below the downward sloping trendline. Also, the prices are trading below the 21- period & 50-period SMA, which can act as resistance in the near term for the index. Utilities, Technology, Healthcare, and Telecom were the leading sectors, while Basic Materials, Industrials, Energy, Financial, and Battery Metals were the laggard on Thursday. The immediate resistance for the index is around 666, while the immediate support exists at around 610 levels. On the weekly time frame, RSI is pointing at ~23.733 levels, which is close to the oversold territory and any bounce from here can take the index towards the north.

On the macro front, the upcoming major economic events that may impact the Canadian market sentiment include Final GDP, Fed Chair Powell Speaks, GDP, Core PCE Price Index, and Unemployment Claims.

Source: REFINITIV, Analysis: Kalkine Group

Global Markets Wrap-Up 

On June 23, 2022, the S&P 500 index settled at 3795.73 with a WTD (week till date) gain of ~3.29%, and the tech-heavy Nasdaq composite, increased by ~3.83% (WTD) and settled at 11697.68, whereas Russell 2000 ended the week at 1711.67, reflecting gains of ~2.76%.

Considering the US market's performance over the last week, following the major global macros and data front, and analysing the S&P/TSXV Composite Index, two TSXV stocks fit the maximum criteria on the technical framework. The recommendations are based on the generic insights, entry price, target prices, and stop-loss for Leveljump Healthcare Corp. (TSXV: JUMP) and Alphamin Resources Corp. (TSXV: AFM) for the next 2-6 weeks.

Leveljump Healthcare Corp.

Leveljump Healthcare Corp. (TSXV: JUMP) provides radiology solutions for hospitals, emergency rooms, and private clinics. The company provides telehealth services that are designed to provide doctor-to-doctor collaboration and diagnosis allowing for efficient and effective patient care.

Price Action Analysis (on the Weekly Chart)

On the weekly chart, JUMP’s price is taking support at the horizontal support line. The stock price has recently started to move up, after taking support from the same trend line, indicating the possibility of an upside movement hereon. The weekly volumes also seem supportive, further indicating positive biasness coming into the price action. The next resistance level is plotted around CAD 0.195, and the stock may test that level in the short term (2-6 weeks).

 Source: REFINITIV, Analysis: Kalkine Group  

Technical Analysis (On the Weekly Chart)

On the weekly chart, The CMP (current market price) is above the trend-following indicator 21-period SMA. The leading indicator RSI (14-period) is also reversing from lower levels and is currently at the 49.541 level. The weekly volumes also seem supportive of an upside movement.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, Leveljump Healthcare Corp. is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decision should be made depending on an investor’s appetite for an upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of the recommendation is as follows:

Alphamin Resources Corp.

Alphamin Resources Corp. (TSXV: AFM) is engaged in the business of production and sale of tin concentrate from the Bisie Tin mine in the Democratic Republic of the Congo (DRC). The company considers its business to consist of one reportable operating segment, being the Extraction and Sale of Tin from its Bisie Tin Mine.

Price Action Analysis (on the weekly chart)

On the weekly chart stock price of AFM’s is trading above the horizontal support line and formed a bullish hammer (bullish reversal) candlestick pattern. The weekly volumes also seem supportive, further indicating positive biasness coming into the price action. The next resistance level is plotted around CAD 1.10, and the stock may test that level in the short term (2-6 weeks).

Source: REFINITIV, Analysis: Kalkine Group

Technical Indicators Analysis (On the weekly Chart)

On the weekly chart, The CMP (current market price) is below the trend-following indicator of 21-period and SMA 50-period SMA. The leading indicator RSI (14-period) is currently pointing at 39.77 levels and heading towards the north, which is very supportive for the stock to follow the same in coming weeks.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, Alphamin Resources Corp. is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decision should be made depending on an investor’s appetite for an upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of the recommendation is as follows:

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and generally include updates on Gross Domestic Product (GDP), Manufacturing PMI, etc. Noted below are the upcoming week's major global economic events that could impact the S&P/TSX Composite Index and listed stocks' prices.

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00); however, returns are generated within 2-6 weeks' time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within a short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors that could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks, etc.

Note: How to Read the Charts?

The Green color line reflects the 21-period moving average, while the Red color line indicates the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black color line in the chart's lower segment reflects the Relative Strength Index (14-Period), which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status, while a reading of 30 or below suggests an oversold status.

The Blue color bars in the chart's lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume. Liquidity in stocks helps in easier and faster execution of the order.

The Orange color lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: - 

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest. 

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Risk Reward Ratio: The risk reward ratio is the difference between an entry point to a stop loss and profit level and this report is based on suggest ~60% Stop Loss of the Target 1 from the entry point.

A trailing stop-loss is a modification of stop-loss in case of favourable movement in the price to protect the gains. Investors can Trail the Stop-Loss as per the levels if the stock price achieves more than 50% of the Target 1. Investors should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1.

The reference date for all price data, volumes, technical indicators, support, and resistance levels is June 24, 2022. The reference data in this report has been partly sourced from REFINITIV.

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

CAD: Canadian Dollar

RSI: Relative Strength Index 

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.