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Traders, stay away from domestic financials

The S&P/TSX Composite’s 0.5 per cent decline since last Thursday has taken some of the froth out of domestic equities, driving the benchmark’s Relative Strength Index below the sell signal of 70 and providing more oversold, bottom-fishing opportunities for traders.

New entries in the oversold category are primarily in the energy sector, where a 22 per cent one-week bludgeoning for Penn West Petroleum sees that stock as the TSX’s most oversold by RSI. Lightstream Resources and Bonavista Energy Corp. round out the top three most oversold after a tough week for both firms, and are followed by Trinidad Drilling Ltd and MEG Energy Corp.