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The S&P/TSX composite index climbed 0.6 per cent Thursday to Thursday despite some horrendous beatings for oil patch stocks. The Relative Strength index, my favoured short-term technical indicator, sees the domestic equity market in reasonably safe territory at 60 but the benchmark is creeping up on the 70 sell signal again.

The big news is the pronounced weakness in some of the oil and gas stocks that were market darlings as recently as a month ago. A stomach-churning 11.1 per cent decline for Advantage Oil & Gas Ltd and a similarly unwelcome 10.1 per cent drop by Birchcliff Energy Ltd. sees those two stocks as the most oversold in the benchmark.

Indications of a flagging U.S. housing market saw Norbord Inc. joining the ranks of oversold stocks after a 4.6 per cent decline. Jean Coutu Group Inc. also makes a rare appearance on the oversold table.

Advantage Oil and Gas is the focus chart this week. Relative Strength readings have generally done a good job at finding market bottoms for the stock, signalling rallies in January and July 2013. An oversold reading in December of 2012 was less helpful – the stock didn't rally – but at least buyers didn't get hurt too bad by significant subsequent price declines.

Advantage is now more oversold than at any time in the past two years. But potential buyers should probably wait for the stock price to stabilize a bit. The fall has been precipitous and downward price momentum appears strong.

As happens often with oil and gas stocks, Advantage Oil & Gas often remains overbought for significant periods. The RSI sell signal of 70 did, however, rescue sellers in May of 2013 from a 20 per cent decline.

Investors flowed to financial and pipeline stocks during the past week (normal behaviour in volatile markets). Bank of Montreal, Royal Bank and Transcanada Corp are now the three most overbought, technically extended stocks in the benchmark.

A bounceback in the gold price pushed Agnico-Eagle Mines Ltd. just barely into overbought territory after a stock price jump of 6.3 per cent.

As always, while technical analysis has been very useful lately it should only be used in addition to fundamental research.

RSI1W Return %PE Ratio TTMPE Ratio Fwd 12M
AAV CT EquityAdvantage Oil & Gas Ltd20.20-11.09N/A9.77
BIR CT EquityBirchcliff Energy Ltd22.61-10.1517.6216.38
BNP CT EquityBonavista Energy Corp23.31-4.21N/A14.21
NBD CT EquityNorbord Inc23.99-4.5811.8921.67
CGX CT EquityCineplex Inc27.03-3.2930.3122.25
HNL CT EquityHorizon North Logistics Inc27.21-4.3320.1211.89
NVA CT EquityNuvista Energy Ltd27.42-9.43N/A37.05
BXE CT EquityBellatrix Exploration Ltd29.06-7.1720.358.94
PJC/A CT EquityJean Coutu Group Inc-Class A29.48-2.2815.7517.52
ECA CT EquityEncana Corp29.54-3.7013.8514.00
RSI1W Return %PE Ratio TTMPE Ratio Fwd 12M
BMO CT EquityBank Of Montreal87.671.7812.4312.19
RY CT EquityRoyal Bank Of Canada85.471.8413.7412.78
TRP CT EquityTranscanada Corp84.763.8823.5021.74
SAP CT EquitySaputo Inc76.790.7822.7719.93
GWO CT EquityGreat-West Lifeco Inc75.241.7014.1212.17
POW CT EquityPower Corp Of Canada75.173.2215.4911.44
NA CT EquityNational Bank Of Canada73.441.5310.9410.63
CNR CT EquityCanadian Natl Railway Co71.573.0723.1619.63
AEM CT EquityAgnico Eagle Mines Ltd71.306.28127.2648.20
CHE-U CT EquityChemtrade Logistics Incom Fd70.861.37N/AN/A
BNS CT EquityBank Of Nova Scotia70.511.1913.7212.78