Javed Mirza, technical analyst, Canaccord Genuity

FOCUS: Technical analysis 

Javed Mirza is a technical analyst and not a portfolio manager. The stocks referenced here are ones he is monitoring closely. 

MARKET OUTLOOK:

Although a permanent shift to higher rates is likely to remain a headwind for robust market returns, Javed’s 2023 technical outlook remains constructive on equity markets and indicates that a new four-year cycle (cyclical bull market) is attempting to take hold. The cycle is characterized as higher for longer and suggests that inflation and yields will remain higher and be in place for longer than most market participants anticipate.

Javed’s favoured thematic ideas for 2023 include U.S. aerospace and defence stocks and select materials plays. These ideas are predicated on the ongoing conflict, infrastructure development in the U.S., and rebuilding war-torn Ukraine. In addition, gold and platinum are his preferred plays in precious metals as the defensive aspects of gold should help to cushion any potential downside. If the U.S. Federal Reserve does pause or ease in 2023, this should be a major tailwind for precious metals in general, and gold in particular. Javed’s favourite contrarian idea for 2023 is the Real Estate Select Sector SPDR Fund (XLRE), which shows improving relative performance, despite a weak technical profile.

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TOP PICKS

Osisko gold royalties (OR TSX)

Lundin Mining (LUN TSX)

Air Canada (AC TSX)

PAST PICKS: December 2, 2022

Canadian Pacific Railway (CP TSX)

• Then: $110.87
• Now: $102.75
• Return: -7%
• Total Return: -7%

Franco-Nevada (FNV TSX)

• Then: $195.88
• Now: $189.20
• Return: -3%
• Total Return: -3%

IGM Financial (IGM TSX)

• Then: $39.65
• Now: $38.73
• Return: -2%
• Total Return: -1%

Total Return Average: -4%