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

The S&P/TSX Composite endured a bit of a beating in the trading week ending with Thursday's close, falling 1.7 per cent. In terms of Relative Strength Index (RSI), the benchmark's reading of 37 is much closer to the oversold buy signal of 30 than the overbought RSI sell signal of 70.

There are 23 index members trading at oversold levels by RSI led by Aimia Inc., Badger Daylighting Ltd., Uni-Select Inc., Westshore Terminals , Enercare Inc. and Stantec Inc. Large cap, widely held names on the oversold this include Power Corp., Inter Pipeline Ltd., Power Financial Corp., Sun Life Financial, Industrial Alliance Insurance and Hydro One Ltd.

I picked Sun Life as the focus chart because of its prominence in the Canadian insurance industry.

RSI Buy signals have effectively forecasted stock price rallies for Sun Life over most of the past 24 months, but they've been less effective recently. An August 24, 2015 buy signal was followed by a 16 per cent price appreciation to October 23. 2015. Another buy signal on June 28, 2016 predicted a 31 per cent rally to November 25.

More recently however, RSI buy signal in late February 2017 and mid-April have been followed by small price surges before the stock headed downwards.

Sun Life's stock price has knifed through the 200-day moving average trend line in recent days and, in light of RSI's lack of recent success finding temporary market bottoms, I don't think the current buy signal is trustworthy enough to act on. I'd prefer to see the stock regain the 200-day moving average first.

As always, there may be a strong fundamental reason for a rally that is not picked up by technical analysis. Fundamental research should always accompany technical studies.

There are only five S&P/TSX Composite constituents trading at overbought, technically vulnerable RSI levels. These are, in order, Blackberry Ltd., Brookfield Renewable Partners, Centerra Gold Inc., Martinrea International Inc. and New Flyer Industries Inc.

Follow Scott Barlow on Twitter @SBarlow_ROB.

NameRSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio FWD
AIM-TAIMIA INC11.388952.388.3502-20.42042-69.45877#N/A N/A#N/A N/A
BAD-TBADGER DAYLIGHTING LTD13.8107721.7930.4147-28.04319-31.2297327.9169294113.70440252
UNS-TUNI-SELECT INC16.2400529.5331.7188-6.87898-0.606945915.7254830715.13697354
WTE-TWESTSHORE TERMINALS INVESTME16.5401319.2425.0149-9.952833-25.8105113.8996349312.07784055
ECI-TENERCARE INC17.6039918.3719.05025-14.319364.0059630.58032844#N/A N/A
STN-TSTANTEC INC20.8852331.1133.215-4.422833-9.84980169.147625215.45454545
JE-TJUST ENERGY GROUP INC21.601017.357.5037-15.96737-0.2129230.6110970612.2296173
SPB-TSUPERIOR PLUS CORP22.4684212.0212.297-2.84553-4.51091554.9079102916.83473389
CUF.UN-TCOMINAR REAL ESTATE INV-TR U23.8432813.1714.8852-4.561914-7.4016978.247595752#N/A N/A
SNC-TSNC-LAVALIN GROUP INC24.2126550.7955.07975-4.745951-11.5810320.419724423.2661475
POW-TPOWER CORP OF CANADA24.4587929.0429.80725-3.314365-2.87304310.554676949.827411168
SLF-TSUN LIFE FINANCIAL INC25.2342144.9247.49405-4.275894-12.8331210.8484356510.99902057
CHE.UN-TCHEMTRADE LOGISTICS INCOM FD25.6379517.8518.2059-2.369144-4.40038558.19924808#N/A N/A
HR.UN-TH&R REAL ESTATE INV-REIT UTS26.5075821.8722.6451-3.2006930.368498318.93450828#N/A N/A
SCL-TSHAWCOR LTD26.5487331.3434.32665-4.088738-12.5201#N/A N/A15.7884131
MDA-TMACDONALD DETTWILER & ASSOC27.1163562.9273.25345-4.664941-5.68831718.8444162111.09700176
ARE-TAECON GROUP INC27.6904815.2616.57475-3.2932210.87484619.2267716116.5689468
IPL-TINTER PIPELINE LTD27.9148326.6528.09345-2.950882-8.96514518.7696541718.71488764
PWF-TPOWER FINANCIAL CORP28.3141132.3233.03955-2.602908-2.95549910.8362048910.0092908
IAG-TINDUSTRIAL ALLIANCE INSURANC28.4851650.4453.2285-7.835548-5.7885219.58935335110.19401778
OTEX-TOPEN TEXT CORP28.6459843.2742.9778-3.4821414.65443634.3976056813.9803287
GWO-TGREAT-WEST LIFECO INC28.7704333.6334.7439-2.357394-3.64571312.4172556211.76285414
H-THYDRO ONE LTD29.4218523.00524.2405-0.7798957-2.00092520.3584063418.56739306
RSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio FWD
BB-TBLACKBERRY LTD79.515213.7610.190257.1651148.91776#N/A N/A724.9812873
BEP.UN-TBROOKFIELD RENEWABLE PARTNER78.7861343.6639.71810.602824710.57149#N/A N/A96.13362593
CG-TCENTERRA GOLD INC71.634778.166.976154.07643529.888718.31663388.525539218
MRE-TMARTINREA INTERNATIONAL INC70.9468811.718.763651.39130436.150567.4503653856.265382558
NFI-TNEW FLYER INDUSTRIES INC70.883955.9643.4282-0.306861935.8922818.2560581217.11341969

Source: Bloomberg/Scott Barlow

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