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Inside the Market The week's most oversold and overbought stocks on the TSX

The S&P/TSX Composite jumped 1.1 per cent for the week ending with Thursday's close, leaving fewer technically oversold opportunities by Relative Strength Index (RSI). The benchmark has an RSI reading of 48, approximately half way between the buy signal of 30 and the sell signal of 70.

There are nine oversold index constituents this week, led by Aimia Inc., which is really oversold after the stock took a severe 62 per cent one-week bludgeoning. Westshore Terminals Investment Corp., Uni-Select Inc., Alaris Royalty Corp., Shawcor Ltd. and Stantec Inc. are also oversold.

I picked Power Corp. as the focus stock this week, despite the fact that it's not quite officially oversold with an RSI of 30.4.

Power Corp. stock has traded in a narrow range between $27 and $33 dollars during the past two years. The effectiveness of RSI buy signals has been mixed for the period. The trend seems to be that buy signals predict small rallies, the stock price re-tests the bottom, and only then rallies sustainably. This sequence is particularly evident in January and February 2016 and also in June and September of the same year.

The low volatility of the stock – when it falls it rarely falls far, limiting investor risk – makes Power Corp. tempting at this point. In non-technical terms, the 4.4-per-cent dividend yield is also attractive.

As always, fundamental research should always be completed before any market transactions.

There are 18 overbought, technically vulnerable index members this week, led by New Flyer Industries Inc., Sleep Country Canada, Air Canada, Brookfield Renewable Partners LP and Amaya Inc. are also overbought with heightened risk of a temporary correction.

Follow Scott Barlow on Twitter @SBarlow_ROB.

RSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio Fwd
AIM-TAIMIA INC6.1831743.338.48155-62.28765-61.62178#N/A N/A#N/A N/A
WTE-TWESTSHORE TERMINALS INVESTME23.8082721.224.9795-8.026024-17.6104115.3156067913.30822348
UNS-TUNI-SELECT INC24.4004431.431.7802-1.9975076.73535816.5612754515.83031503
AD-TALARIS ROYALTY CORP24.8505120.0722.33365-3.137064-14.1418612.043543811.70262391
SCL-TSHAWCOR LTD26.5997232.5634.26705-4.403993-8.790796#N/A N/A16.97601668
STN-TSTANTEC INC26.7274231.8833.26955-7.082489-5.67810170.8590867915.84493042
ATA-TATS AUTOMATION TOOLING SYS27.8443212.0511.8134-2.665589-3.75399630.1366030717.64275256
SPB-TSUPERIOR PLUS CORP28.65212.312.2766-1.204816-1.71416213.7073472415.56962025
TECK.B-TTECK RESOURCES LTD-CLS B29.3086524.827.46395-0.6012085-7.7037648.5233938775.699839117
H-THYDRO ONE LTD30.3379923.0824.31335-3.913408-1.23062720.4247786918.64297254
RSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio Fwd
NFI-TNEW FLYER INDUSTRIES INC87.0231555.443.085857.01178536.3105717.9003979916.86391919
ZZZ-TSLEEP COUNTRY CANADA HOLDING83.2517339.2530.829511.5056837.0613328.3008936624.36374922
AC-TAIR CANADA81.9306316.4612.4549528.6942920.409655.2740078185.709330558
BEP.UN-TBROOKFIELD RENEWABLE PARTNER79.781243.1339.65172.9601389.908931#N/A N/A129.6586453
AYA-TAMAYA INC78.214525.6720.1937.13689935.0341919.012700948.917571199
BBU.UN-TBROOKFIELD BUSINESS PT.UNNIT78.0540937.4432.346473.48258216.34026#N/A N/A22.05679719
VRX-TVALEANT PHARMACEUTICALS INTE77.3682418.8523.465338.90937-3.184381#N/A N/A3.514594443
VSN-TVERESEN INC77.0065518.513.4450.488865644.4401472.3730537535.44061303
MRE-TMARTINREA INTERNATIONAL INC76.7521411.58.689556.0885634.282287.3167550516.153023007
DRG.UN-TDREAM GLOBAL REAL ESTATE INV74.8598310.359.371153.70742312.5487216.46157357#N/A N/A
LNR-TLINAMAR CORP74.7825163.8356.216858.20478110.860197.4610599237.786995242
WPK-TWINPAK LTD73.7865958.6947.83490.496570429.2893526.1444948324.15604008
DHX.B-TDHX MEDIA LTD72.68566.46.612416.36364-8.91185554.3510576818.18181818
MG-TMAGNA INTERNATIONAL INC72.0851861.1755.7525.3746755.5985368.0474195167.607340114
BB-TBLACKBERRY LTD71.6845212.8410.10130.943395338.96104#N/A N/A670.0342107
MRU-TMETRO INC70.8075746.142.0858-0.345870915.2586918.8909180516.67872648
QSR-TRESTAURANT BRANDS INTERN70.7393281.1865.900553.98411327.7673537.8636725929.75569122
DOL-TDOLLARAMA INC70.36186122.33102.64511.0490724.5857232.9028063628.52845149

Source: Bloomberg/Scott Barlow

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