Sid Mokhtari, chief market technician at CIBC Capital Markets.Supplied
In August, the S&P/TSX composite index was up for a fifth consecutive month and closed at a record high on August 25.
Last month, the index advanced 2.96 per cent; however, strength was concentrated in three sectors. The only sectors that posted gains were materials, technology and communication services with price returns of 25.65 per cent, 12.85 per cent and 3.89 per cent, respectively.
Gold and silver stocks surged. In fact, the top 10 performing stocks in the Index were exclusively gold and silver stocks.
The worst performing sectors were health care, consumer staples, utilities, real estate and consumer discretionary with losses of 7.19 per cent, 6.94 per cent, 6.08 per cent, 4.85 per cent and 4.36 per cent, respectively.
In this challenging stock picker’s market, CIBC’s chief market technician Sid Mokhtari helps investors identify stocks with strong technical and quantitative characteristics that may lead to portfolio outperformance.
Mr. Mokhtari publishes a monthly report with his top 10 stock ideas. He screens and selects stocks from the largest 100 members by market capitalization within the S&P/TSX Composite Index. His technically driven stock recommendations have consistently outperformed the broader index across a wide range of market conditions.
However, last month, his portfolio of top picks was relatively unchanged, declining 0.03 per cent, while the S&P/TSX Composite Index rallied 2.96 cent.
Year-to-date, his basket of top picks is up a respectable 10.61 per cent but trails the 14.38 per cent return for the TSX Index.
Importantly, his disciplined process has delivered strong long-term returns. His stock selections have outperformed the S&P/TSX Composite Index for the past four calendar years. In 2025, his portfolio of stock selections rallied 51.3 per cent, compared to a 28.3 per cent price return for the S&P/TSX Composite Index. His stock selections also outperformed the TSX Index in 2024, 2023 and 2022 by 5.8 percentage points, 6.3 percentage points and 2.7 percentage points, respectively.
For September, his diversified basket of stock selections includes 10 new stocks. His portfolio is tilted toward commodities with 30 per cent exposure to the energy sector and a 30 per cent weighing in the materials sector.
In energy, he added Cenovus Energy Inc. (CVE-T), Kelt Exploration Ltd. (KEL-T) and Whitecap Resources Inc. (WCP-T).
In materials, G Mining Venture Corp. (GMIN-T), Methanex Corp. (MX-T) and Teck Resources Ltd. (TECK.B-T) were added.
The portfolio holds two technology stocks: Constellation Software Inc. (CSU-T) and Shopify Inc. (SHOP-T).
In financials, Brookfield Asset Management Ltd. (BAM-T) made the list.
In industrials, GFL Environmental Inc. (GFL-T) was included.
In his best ideas report published on Aug.t 31, Mr. Mokhtari cautions, “As markets enter September, the surface still looks reassuring – major equity indices remain well supported with positive fundamentals; earnings revision beating estimates, broadening market breadth and rotational accumulation during corrective mean-reversion periods. Yet, beneath that relatively calm headline posture, the internals are beginning to run out of steam and look fragile – summation index, a measuring tool for the rate of change in market breadth, is faltering and the new highs in the market are not being represented by a higher participation in new 52-week highs, a potential sign of complacency – after all, September is historically the weakest month of the year.
According to Mr. Mokhtari, over the past 30 years, the S&P/TSX Composite Index has declined by an average of 0.8 per cent in September with seven of the 11 sectors realizing negative average returns.
He warns, “We advocate the internal market structure has become stretched. Breadth is faltering by way of narrowing again. Momentum has worked so well that it is now more fragile and susceptible to mean-reversion. VIX looks too low. And September has a habit of punishing complacency.”