{"id":130339,"date":"2025-08-09T00:04:23","date_gmt":"2025-08-09T00:04:23","guid":{"rendered":"https:\/\/www.europesays.com\/us\/130339\/"},"modified":"2025-08-09T00:04:23","modified_gmt":"2025-08-09T00:04:23","slug":"the-stock-picks-of-cibcs-mokhtari-have-doubled-the-returns-of-the-tsx-this-year-here-are-his-top-10-favourites-for-august","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/130339\/","title":{"rendered":"The stock picks of CIBC\u2019s Mokhtari have doubled the returns of the TSX this year. Here are his top 10 favourites for August"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Sid Mokhtari, chief market technician at CIBC Capital Markets.Supplied<\/p>\n

Price momentum has surged in recent weeks, with the S&P\/TSX Composite Index opening at a record high just shy of 28,000 on Thursday. Over the past 27 trading sessions, the index has rallied more than 1,000 points. As of the close on August 7, it is up an impressive 12 per cent year-to-date. Given this strong price momentum, is the market overextended in the near term?<\/p>\n

On August 5, The Globe and Mail spoke with Sid Mokhtari, CIBC\u2019s chief market technician, to get his technical take on where markets may be headed over the historically weak summer months. His recommendations have consistently outperformed the broader index across a wide range of market conditions. <\/p>\n

Mr. Mokhtari publishes a monthly report with his Top 10 stock ideas and his disciplined process continues to lead to portfolio outperformance. He screens and selects stocks from the largest 100 members by market capitalization within the S&P\/TSX Composite Index. In July, his basket of 10 stock recommendations rallied 2.66 per cent compared to a 1.50 per cent return for the S&P\/TSX Composite Index. In the first seven months of 2025, his portfolio of stock selections delivered a 20.2 per cent return, compared to a 10.2 per cent gain for the broader index. His stock selections also outperformed the S&P\/TSX Composite Index in 2024, 2023 and 2022 by 5.8 percentage points, 6.3 percentage points and 2.7 percentage points, respectively.<\/p>\n

For August, he has a diversified basket of stock selections across six sectors including eight additions – AltaGas (ALA-T<\/a>), Capital Power (CPX-T<\/a>), Colliers International Group (CIGI-T<\/a>), Dollarama (DOL-T<\/a>), Gildan Activewear (GIL-T<\/a>), Power Corp. (POW-T<\/a>), Suncor (SU-T<\/a>) and Whitecap Resources (WCP-T<\/a>) \u2013 and two carryovers from the prior month, Bank of Montreal (BMO-T<\/a>) and Shopify (SHOP-T<\/a>). <\/p>\n

Discussed below are Mr. Mokhtari\u2019s top stock and ETF picks, along with his views on how market action may play out in the upcoming months. <\/p>\n

Last month, which stocks drove the strong outperformance of your basket of top 10 stock ideas relative to the TSX Composite Index? And do the technical indicators remain attractive for those winners? <\/b><\/p>\n

NGEx Minerals (NGEX-T<\/a>) was a name that performed very well for us last month, and I still think it\u2019s a very good name. It still has the takeout bias, the Street likes it, the fundamental backing for it is still very strong. We found the backdrop of technical indicators to be somewhat elevated, which makes it susceptible to mean reversion. But we believe pullbacks in the share price would be a great buying opportunity. And for those who are long the name, I think it\u2019s a good name for people to hold on to. <\/p>\n

Generally speaking, the basket composition was very good. We had a 70 per cent positive hit rate, which means that seven out of the 10 names worked. Historically, we have a positive hit rate ranging from 60 per cent to 80 per cent on a monthly basis so this was within the historical norm.<\/p>\n

Should investors reduce their exposure to growth and momentum stocks, or will they continue to be leaders? <\/b><\/p>\n

I still think they are likely to stay strong. <\/p>\n

But we\u2019re starting to see a positive rate of change in low volatility, dividend yield and somewhat to value. This doesn\u2019t mean that growth and momentum factors are not working. They\u2019re definitely still working but the rate of change of performance from both momentum and growth is beginning to slow down. We are noticing a very sharp delta in other factors, i.e., low volatility, quality and dividend yield compared to momentum and growth. <\/p>\n

This month, we have high beta and low beta stocks – a barbell strategy – between now through to the end of September when seasonally adjusted returns historically are more defensively tilted. <\/p>\n

What are the historical returns for August and September? <\/b><\/p>\n

Based on 10- and 30-year historical observations for both the S&P 500 and the TSX Composite Index, we find the average return for August to be on the weaker side ranging between -0.2 per cent and -0.7 per cent with a 55 per cent positive hit rate (a hit rate is a measure of frequency of observations). We also found that the cumulative weekly average return for both indices tends to peak by mid-August and rolls over well into September. Additionally, we also looked at three other permutations for the S&P 500 monthly returns back to 1949: year one of the U.S. presidential cycle, years following 20 per cent gains for the S&P 500, and year-three of a bull market, knowing in hindsight that 2022 marked the beginning of the current upcycle. Average returns under such permutations were negative, albeit shallow with -1 per cent for August and -0.5 per cent for September for the S&P500. Comparatively, the TSX had a weaker average return in the month of September at -1 per cent, while the August average return was shallower at -0.1 per cent.<\/p>\n

The TSX Composite Index is within your official target range of 27,235 to 27,500. Is the index due for a near-term pullback, pause or poised to rally further? <\/b><\/p>\n

In our opinion, we have higher odds of a mean reversion retracement.<\/p>\n

We think the downside risks are not that huge, anything between 3 per cent and 8 per cent, and I think it would be a buying opportunity. <\/p>\n

We\u2019re starting to see overbought conditions in pockets of the market developing. It\u2019s not significant but it\u2019s there to note.<\/p>\n

Where are you seeing these pockets of overbought conditions?<\/b><\/p>\n

In Canada, financials, REITs and by some measures, utilities are areas where overbought readings are higher on a weekly RSI basis as well as the stochastics. <\/b><\/p>\n

Ahead of the bank earnings season, what do the technicals suggest? <\/b><\/p>\n

Historically, banks do well into their earnings and usually you see profit-taking afterwards. <\/p>\n

Historically, which sectors have been the strongest and weak weakest in August?<\/b><\/p>\n

For the TSX, surprisingly, on a 30-year basis, technology tends to have the highest hit rate at 63 per cent with an average return of 0.7 per cent. Materials with its exposure to gold tends to bring about a performance of 0.8 per cent on a 30-year seasonally adjusted basis with a hit rate of 53 per cent. So again, hit rates are generally weak across the board, but technology and materials in Canada are the two bright spots.<\/p>\n

Let\u2019s turn to your top 10 best stock ideas for August. You have two carryovers and eight additions. Can you highlight a few of your additions?<\/b><\/p>\n

We like Gildan. Gildan is one where the rate of change of our technical indicators is consistent with the positive fundamental narrative that we have. We also note that a couple of big dealers in Canada have upgraded Gildan this month, which is helping buoy the share price. The company also has a share buyback program, which should help support the stock. <\/p>\n

We measure a technical target for Gildan to be $76.64.<\/p>\n

Any other companies that you want to highlight?<\/b><\/p>\n

Both Suncor and Whitecap Resources have picked up good deltas in our work. They both show stronger relative strength in our matrix process. <\/p>\n

Whitecap Resources has had a strong run up to its upper technical range of the past few years, which may offer some resistance. But it has also produced enough momentum to better cushion the downside risk from a mean reversion perspective, representing a buying opportunity. A technical measured move for Whitecap may be calculated toward a target of $11.90 to $12. <\/p>\n

On the defensive side of the energy sector, we would favour both Enbridge (ENB-T<\/a>) and Gibson Energy (GEI-T<\/a>). Within the energy sector, pipelines and midstream companies continue to show better performance given their higher dividend yield backdrop. I have generally been very comfortable with the technical scores for both Enbridge and Gibson relative to other energy sector members. <\/p>\n

The U.S. Federal Reserve is expected to cut interest rates in September, which may be positive for U.S. equities and potentially homebuilders. In a recent note, you said the SPDR S&P Homebuilders ETF (<\/b>XHB-A<\/b><\/a>) is reversing its downtrend. <\/b><\/p>\n

A positive reversal occurred for XHB in July. XHB is currently sitting above its 50-day and 200-day moving averages with a positive turn in its 50-day moving average. We have a price target of $112 and subsequently $118. <\/p>\n

Are there other thematic ETFs moving up in your rankings? <\/b><\/p>\n

Global X Artificial Intelligence & Technology ETF (AIGO-T<\/a>) shows high delta so that\u2019s one. And I still like Amplify Transformational Data Sharing ETF (BLOK-A<\/a>), which is U.S. crypto miners. <\/p>\n

Is the crypto rally still intact? <\/b><\/p>\n

I think so. I still am of the view that Bitcoin and Ethereum are the two areas of focus that are likely to be able to continue to build on the trend. Obviously, Bitcoin is the leader, but we have been seeing good price action with Ethereum as well. It was a laggard and was able to catch up. <\/p>\n

I do want us to remind ourselves that if momentum slows down in August and September, crypto will follow suit. I\u2019m mindful of that. <\/p>\n

Do you still like gold?<\/b><\/p>\n

Yes. We have a technical target for gold of U.S. $3,700, U.S. $3,800 on the upside and U.S. $3,250, U.S.$3,100 on the downside. The worst-case scenario for gold is technically closer to U.S.$3,000 but just given the dominant structure of trends that we have for gold in different currency terms, those trends are very positive for the commodity. <\/p>\n

Also, we are starting to see some of the laggards move, i.e. Barrick Mining (ABX-T) is starting to come out of a base, so I think it\u2019s one of the laggards that should be able to participate.<\/p>\n

Use pullbacks or mean reversions closer to U.S.$3,100, should we go there, as an opportunity with a bias that U.S.$3,700, U.S.$3,800 are to be validated by year-end. <\/p>\n

Are you seeing any interesting opportunities globally? <\/b><\/p>\n

I think aerospace is an interesting theme that has been developing as well as infrastructure. <\/p>\n

Aerospace is a good area. We don\u2019t have a lot of those companies in Canada, but we do in the U.S. The names that stand out for us in Canada would be CAE (CAE-<\/a>T) as well as Bombardier (BBD-B-T<\/a>), but Bombardier has already had a fantastic run. MDA Space (MDA-T<\/a>), which we have talked about in the past, would be another good name. <\/p>\n

The infrastructure ETFs, Global X U.S. Infrastructure Development ETF (PAVE-A<\/a>), as well as iShares Global Infrastructure ETF (IGF-Q<\/a>), are showing very strong upside durability. <\/p>\n

Last month, you talked about the improving ranking for the U.S. market. Are you still seeing that momentum? <\/b><\/p>\n

SPDR S&P 500 ETF (SPY-A<\/a>) has picked up 33 points, rising to number 10 out of 63 ETFs that we collectively follow. So, it has had a fantastic run up relative to the rest of the world. <\/p>\n

Where\u2019s Canada ranking?<\/b><\/p>\n

iShares MSCI Canada ETF (EWC-A<\/a>) is now number 20, and it\u2019s been holding itself quite well. <\/p>\n

Another area of focus is Japan. WisdomTree Japan Hedged Equity Fund ETF (DXJ-A<\/a>) has had a fantastic delta expansion of 44. It\u2019s now ranked number 12. <\/p>\n

What are the top three ETFs? <\/b><\/p>\n

Number one is Hong Kong iShares MSCI ETF (EWH-A<\/a>), which is by some measures reflecting what Japan is doing. China has been coming up. iShares China Large-Cap ETF (FXI-A<\/a>) had a 27-point jump and sits at number three. And Global X MSCI Greece ETF (GREK-A<\/a>) lost one point, dropping to number four. So, I would say Hong Kong, China and Greece are good areas of focus.<\/p>\n

Number two is iShares MSCI South Korea (EWY-A<\/a>) but I\u2019m marking that one with a high risk of mean reversion in our model given its very deeply overbought condition.<\/p>\n

Is there anything else that you want to highlight to our readers?<\/b><\/p>\n

We should be very mindful of the weaker historical seasonal influences over the next couple of months \u2013 history doesn\u2019t always repeat, but it often rhymes. I think it is prudent not to be too aggressive either. High grading into quality may be the right strategy between now through to September.<\/p>\n

This Q&A has been edited for clarity<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Sid Mokhtari, chief market technician at CIBC Capital Markets.Supplied Price momentum has surged…\n","protected":false},"author":3,"featured_media":130340,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[2148,2138,671,104,2132,692,64,2147,2131,2143,2144,2140,2133,2130,79,407,746,2142,2137,2159,2134,2135,454,2139,1165,728,2149,135,108,2154,2155,2157,2152,2156,2150,2153,2136,85,2146,80,2145,2151,1458,158,1164,2141,67,132,68,1154,107,2158],"class_list":{"0":"post-130339","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-alberta","9":"tag-arts-news","10":"tag-bc","11":"tag-breaking-news","12":"tag-breaking-news-video","13":"tag-british-columbia","14":"tag-business","15":"tag-canada","16":"tag-canada-news","17":"tag-canada-sports","18":"tag-canada-sports-news","19":"tag-canada-trafficcanada-weather","20":"tag-canadian-breaking-news","21":"tag-canadian-news","22":"tag-economy","23":"tag-education","24":"tag-environment","25":"tag-federal-government","26":"tag-foreign-news","27":"tag-globe-and-mail","28":"tag-globe-and-mail-breaking-news","29":"tag-globe-and-mail-canada-news","30":"tag-government","31":"tag-life-news","32":"tag-lifestyle","33":"tag-local-news","34":"tag-manitoba","35":"tag-markets","36":"tag-national-news","37":"tag-new-brunswick","38":"tag-newfoundland-and-labrador","39":"tag-northwest-territories","40":"tag-nova-scotia","41":"tag-nunavut","42":"tag-ontario","43":"tag-pei","44":"tag-photos","45":"tag-political-news","46":"tag-political-opinion","47":"tag-politics","48":"tag-politics-news","49":"tag-quebec","50":"tag-sports-news","51":"tag-technology","52":"tag-travel","53":"tag-trudeau","54":"tag-united-states","55":"tag-unitedstates","56":"tag-us","57":"tag-us-news","58":"tag-world-news","59":"tag-yukon"},"share_on_mastodon":{"url":"","error":"Validation failed: Text character limit of 500 exceeded"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/130339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=130339"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/130339\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/130340"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=130339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=130339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=130339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}