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The S&P/TSX Composite Index was lower by 2.4 per cent for the five trading days ending with Thursday's close but is not officially oversold, according to Relative Strength Index (RSI). The benchmark's RSI reading of 34.2 remains above the oversold, buy signal of 30.

There are 23 constituents of the S&P/TSX Composite stocks on the oversold list this week. Snowmobile manufacturer BRP Inc. is the most oversold company with an anemic RSI reading of 13.4. followed by copper miner Hudbay Minerals, Mitel Networks Corp., and Air Canada. The most widely held oversold TSX stocks are Canadian Pacific Railway Ltd. and Canadian Imperial Bank of Commerce with RSIs of 28.0 and 28.7 respectively.

Like last week, there are no benchmark stocks that are both oversold and trading above their 200-day moving average. Due to market volatility, I've been avoiding all companies trading below the 200-day in this weekly report – technical buy signals are less effective when the stocks are in an extended downtrend.

Descartes Systems is not officially oversold, the RSI is still four points above 30, but it's the most oversold stock in the benchmark that is trading above its 200 day moving average.

The good news is that RSI has worked extremely well in identifying both buy and sell signals for Descartes stocks. A buy signal in May 2014 marked a long-term bottom for the stock price. Another in October 2014 was followed by a 87-per-cent appreciation to November of 2015. Buyers of Descartes on the buy signal in April 2015 would have benefitted almost as much.

Again, Descartes is not yet officially oversold at this point with an RSI of 35.2. But the stock's longer term uptrend, as measured by the 200-day moving average remains intact. As always, investors should complete fundamental analysis before buying any stock for their portfolios.

There is only one TSX Composite stock trading at overbought, technically vulnerable levels according to RSI – Progressive Waste Solutions. This information is, unfortunately, not that useful for investors – the company was acquired by Waste Connections Inc and the big gains for the stock are now behind it.

According to web traffic statistics here at the Report on Business, last week's report on oversold stocks was the most read ever. I appreciate the interest, but on the other hand, when three times as many readers are looking for buying opportunities, a contrarian might find this to be a good reason for caution.

Follow Scott Barlow on Twitter @SBarlow_ROB.