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Canadian banks and REITs are oversold

Major bank stocks have gone from overbought to oversold in a heartbeat. With earnings report-related volatility now likely behind us, the Relative Strength Index strongly suggests bank stocks are due for a bounce.

The S&P/TSX Composite fell about 1.5 per cent over the past five sessions, resulting in a much wider selection of oversold stocks for traders to choose from. Bank of Montreal and Royal Bank of Canada are among the highlights after both fell below the RSI buy signal of 30.