I recommend being very careful with the Relative Strength index (RSI) numbers this week in light of recent events. The version of RSI I use is the popular, shorter term 14-day version and it can change quickly in volatile markets.
The S&P/TSX Composite Index eased higher by 0.4 per cent for the trading week ending with Friday’s close and is now 3.5 per cent higher for the year. The benchmark’s RSI of 59 leaves it in the upper reaches of technically neutral territory, closer to the overbought sell signal of 70 than the oversold, technically attractive buy signal at 30.
There are six stocks with attractive RSIs below 30 this week. Topaz Energy Corp is the most oversold company in the index. Canopy Growth Corp., Trisura Group Ltd., Air Canada, Storagevault Canada Inc. and Rogers Communications Inc. are next.
There are also six companies with RSIs suggesting temporary vulnerability to a correction, beginning with CGI Inc., Franco Nevada Corp., Blackberry Ltd., Agnico Eagle Mines Ltd., Gildan Activewear Inc. and Toronto-Dominion Bank follow.
There are five index constituents showing strong price momentum by hitting new 52-week highs and they are ranked by market capitalization in the table below. Franco-Nevada is the biggest company making new highs followed by Celestica Inc., Methanex Corp, Blackberry and Dundee Precious Metals Inc.
Stocks making new lows are Rogers Communications, Trisura, Storagevault and Mattr Corp.
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