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Overbought and oversold: Energy goes from first to worst Add to ...

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A number of smaller energy companies have gone from first to worst in record time.

The S&P/TSX energy index spent the entire month of April above the 70 Relative Strength Index level that suggests stocks are overbought and set for a fall. The index has dropped 1.7 per cent from its early May peak, and many stocks in the sector have fallen from drastically overbought to oversold, making them potential candidates for a bounce.

Yield-based market sectors now dominate the list of overbought companies. This is no surprise in light of the huge rally in government bonds this week, which affected the dividend yields of companies like Bell Aliant Inc., Manitoba Telecom Services Inc. and Canadian Apartment Property REIT.

This week’s technical data suggest that investors, particularly those who already hold a lot of dividend stocks, should probably hold off on adding more, at least for a few days until they cool off.

For the energy sector, it’s probably too early to dive in. but, it does look like a good time to start researching individual companies in case they get more oversold.

Caveats: technicals only tell part of the story and, because our favoured RSI measure takes only 14 days of data into account, the results can change extremely quickly. Investors should not buy or sell investments based on technical analysis alone.

Follow Scott Barlow on Twitter @SBarlow_ROB.

RSI1W Return %PE Ratio TTMPE Ratio Fwd
Cott CorporationBCB22.71-3.2819.5420.75
Just Energy Group IncJE24.45-9.9728.04N/A
Avigilon CorpAVO27.430.0530.5920.79
Silver Standard ResourcesSSO27.82-7.74N/AN/A
Cameco CorpCCO29.61-2.2123.9321.64
Transforce IncTFI30.32-2.4227.3813.22
Transglobe Energy CorpTGL31.15-2.869.918.26
Athabasca Oil CorpATH31.25-4.28N/AN/A
Blackpearl Resources IncPXX31.25-4.0560.7755.12
Bell Aliant IncBA83.500.5322.6518.32
Manitoba Telecom Svcs IncMBT81.802.3717.7318.20
Aimia IncAIM77.894.50N/AN/A
Bank Of Nova ScotiaBNS76.101.1213.1212.15
Can Apartment Prop Real EstaCAR.U76.085.489.58N/A
Fairfax Financial Hldgs LtdFFH74.624.9328.1521.09
Telus CorpT74.463.0218.6317.25
Brookfield Asset Manage-Cl ABAM.A71.552.4812.8719.94
Bce IncBCE71.141.8016.4715.87
Allied Properties Real EstatAP.U70.411.1910.7217.24
Gibson Energy IncGEI70.331.7127.3730.68
Algonquin Power & UtilitiesAQN70.242.78N/A20.45
Pembina Pipeline CorpPPL69.931.8438.6935.06
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Follow on Twitter: @SBarlow_ROB

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