In this TSX Breakouts report, there are 23 stocks on the positive breakouts list (stocks with positive price momentum), and 44 securities are on the negative breakouts list (stocks with negative price momentum).
While the negative breakouts list is longer than the positive breakouts list, it is not alarming. Typically, during periods of extreme nervousness and market capitulation, the negative breakouts list expands to include more than 100 securities. Tariff concerns and their impact on the economy have yet to create any panic in the market.
However, risk appetite has declined with many defensive stocks outperforming. For instance, the utilities sector was the best performing sector in the S&P/TSX Composite Index in February. Furthermore, multiple gold stocks were on the positive breakouts list several days ago when the price of gold rallied to a record high before retreating at month end.
On the positive breakout list, three stocks - Innergex (INE-T), Dollarama (DOL-T) and Medical Facilities (DR-T) - are in overbought territory with relative strength index (RSI) readings of 89, 72 and 70, respectively. Generally, an RSI reading at or above 70 reflects an overbought condition. On Feb. 25, management at Innergex announced that it received a takeover offer from CDPQ, the Caisse de dépôt et placement du Québec, at a substantial premium to the prior day’s closing price.
Meanwhile, 17 stocks on the negative breakouts list are in oversold territory, as indicated by an RSI reading of 30 or below. They are: Andlauer Healthcare (AND-T), Calian (CGY-T), Canopy Growth (WEED-T), Cargojet (CJT-T), Cascades (CAS-T), Cipher Pharmaceuticals (CPH-T), Docebo (DCBO-T), Exco Technologies (XTC-T), Frontera Energy (FEC-T), North American Construction Group (NOA-T), Pet Valu (PET-T), Precision Drilling (PD-T), Propel Holdings (PRL-T), SunOpta (SOY-T), TELUS International (TIXT-T), and Tilray (TLRY-T).
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The Breakouts file is a technical analysis screen intended to identify companies that are technically breaking out. In addition, this report highlights a company’s dividend policy, analysts’ recommendations, financial forecasts, and provides a brief technical analysis for a security to provide readers with more information.
If a stock appears on the positive breakouts list, this indicates positive price momentum, and that a company may be worthwhile for investors to look at the fundamentals in order to determine if the recent price strength is warranted and will continue. If a security appears on the negative breakouts list, this indicates negative price momentum, and may be indicative of either deteriorating fundamentals or perhaps indicates a buying opportunity.
Securities screened are from the S&P/TSX composite index, the S&P/TSX Small Cap index, as well as Canadian small cap stocks outside of these indexes that have a minimum market capitalization of $200-million.
A technical analysis screen does not replace fundamental analysis, but can help identify companies worth having a closer look at.