The S&P/TSX Composite had been trading at frothy, overbought levels for a few weeks, according to Relative Strength Index (RSI), and we’ve had a bit of a correction during the trading week ending with Thursday’s close.
The index fell 1.5 per cent for the week but still sits 21.0 per cent higher for 2019.
The benchmark’s current RSI level of 48 puts it about mid-way between the oversold buy signal of 30 and the overbought RSI sell signal of 70.
There are bank stocks in both the oversold and overbought lists this week, and I’m not sure if that’s happened before. Mediocre earnings reports from Toronto-Doiminion Bank, Laurentian Bank of Canada, Royal Bank of Canada, Canadian Imperial Bank of Commerce and Canadian Western Bank have those stocks oversold.
Westshore Terminals Investment Corp. is the most oversold stock in the index.
The overbought, technically vulnerable list of benchmark constituents is led by National Bank of Canada. National’s RSI of 88 is well about the sell signal of 70.
There are a number of REITs on the overbought list – Riocan REIT, Dream Office REIT, Northwest Healthcare Properties and Boardwalk REIT.
Other prominent names on the overbought list include Capital Power Corp., Hydro One Ltd., Ritchie Brothers Auctioneers and Telus Corp.
There are 22 S&P/TSX Composite companies showing strong price momentum by hitting new 52-week highs, and they are ranked by market capitalization below.
The list is once again led by National Bank, followed by Hydro One, Bausch Health Companies Ltd., and Canadian Utilities Ltd.
There are no index members falling to new 52-week lows this week.