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The S&P/TSX Composite dropped 0.66 per cent for the trading week ending with Thursday's close (the last few days had me expecting a much more negative result), and the benchmark stands 4.7 per cent lower for the year.

In terms of technical analysis, the index's current Relative Strength Index (RSI) reading of 39.8 is in the neutral range although closer to the oversold buy signal of 30 than the RSI sell signal of 70.

There are 26 oversold, technically attractive benchmark stocks this week according to RSI.

AltagGas Ltd is the most oversold stock in the index, followed by Crew Energy Inc., Industrial Alliance Insurance , Maxar Technologies Ltd., Barrick Gold Corp., Badger Daylighting Ltd., Element Fleet Management Corp., Shaw Communications Inc., Freehold Royalties Ltd. and Uni-Select Inc.

I chose bicycle, baby stroller and home furnishings provider Dorel Industries Ltd. for the focus chart this week. The stock price has done next to nothing over the past two years but RSI buy and sell signals have been successful in predicting rallies and declines.

An RSI buy signal in early October 2016 presaged a 20-per-cent rally to mid-December 2016. A series of buy signals in March 2017 was followed by an 11-per-cent rally and similarly, Dorel rallied 15 per cent between Sept. 1 and Nov. 1, 2017 after a period of being oversold by RSI.

RSI sell signals warned of imminent price declines in July and December 2016 and in October of 2017.

The stock price was also sensitive to the 200-day moving average in the last 24 months. The moving average trend line appears to have formed price support in October 2016 and resistance to further rallies in May, July, October and December of 2017.

Overall, I think this is a stock to trade, not invest in, until it breaches the 200-day moving average to the upside and stays there for a bit.

RSI uncovered only three S&P/TSX Composite members trading above the overbought RSI sell signal – Stars Group Inc., Air Canada and Northview Apartment REIT.

Investors should complete fundamental research before any market transactions.

RSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio Fwd
ALA-TALTAGAS LTD18.2669124.3528.7385-7.58645-13.7942539.7949300822.23744292
CR-TCREW ENERGY INC18.490541.413.614-17.05883-55.2381#N/A N/A#N/A N/A
IAG-TINDUSTRIAL ALLIANCE INSURANC20.3965753.6756.51225-3.688528-9.64560711.158003789.880338733
MAXR-TMAXAR TECHNOLOGIES LTD20.4512660.0472.36205-19.68967-25.8032630.050970710.98426637
ABX-TBARRICK GOLD CORP21.5600114.619.6423-7.709854-19.4872513.4315122314.21155517
BAD-TBADGER DAYLIGHTING LTD22.7012123.1226.59775-7.342588-14.6810620.4121639913.6
EFN-TELEMENT FLEET MANAGEMENT COR23.475724.89.0355-3.420519-49.47368#N/A N/A6.374501992
SJR.B-TSHAW COMMUNICATIONS INC-B23.6854724.7628.04725-1.589824-13.0503118.32587659#N/A N/A
FRU-TFREEHOLD ROYALTIES LTD25.3605612.1614.01945-4.928881-12.7961333.4049410993.53846154
UNS-TUNI-SELECT INC25.7874722.3927.75718-1.712031-21.1897214.3081297312.69740778
DII.B-TDOREL INDUSTRIES-CL B26.1962527.2131.6059-7.637478-12.5080411.978121458.75908156
ECI-TENERCARE INC26.2240118.0119.98655-3.067814-11.4411730.1787773823.69736842
ENB-TENBRIDGE INC26.238440.7849.47205-4.204842-15.7476917.8522721317.88596491
LB-TLAURENTIAN BANK OF CANADA26.4779649.0255.65785-6.145892-13.284987.981133218.101140307
PSK-TPRAIRIESKY ROYALTY LTD26.5866128.0430.7573-4.192327-12.174255.10432466110.8300395
SPE-TSPARTAN ENERGY CORP26.749515.266.34165-9.931503-26.84283#N/A N/A40.46153846
VRX-TVALEANT PHARMACEUTICALS INTE27.4368519.4420.49005-15.98963-25.80153#N/A N/A4.965906517
IGM-TIGM FINANCIAL INC27.7506239.0942.2124-0.02557506-11.4609312.929747111.85623294
KDX-TKLONDEX MINES LTD28.365131.753.6881-3.314917-46.31902#N/A N/A15.42774485
AIF-TALTUS GROUP LTD28.5072231.4932.48725-7.789166-14.7305796.9958687322.67098632
RRX-TRAGING RIVER EXPLORATION INC28.534296.037.5583-5.48589-24.62523.5155569615.86842105
MFC-TMANULIFE FINANCIAL CORP28.5767524.1925.37805-1.265304-6.91978410.636422359.29669485
RNW-TTRANSALTA RENEWABLES INC28.8991211.4913.9501-2.299654-13.0608724.7518882113.31402086
WCP-TWHITECAP RESOURCES INC28.974057.599.0939-7.022214-14.6777741.501944724.8852459
STN-TSTANTEC INC29.1899632.0834.0311-1.625263-8.7599524.0175683316.07214429
AEM-TAGNICO EAGLE MINES LTD29.3361549.5958.4539-2.846357-14.3126334.2783004455.59923091
GIL-TGILDAN ACTIVEWEAR INC29.5353536.8939.30685-1.310863-9.16030716.6502381815.29733009
RSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio Fwd
TSGI-TSTARS GROUP INC/THE84.4515335.726.3135.12367722.0512821.2852172811.72064644
AC-TAIR CANADA71.9299227.322.759955.0403975.4868596.6442253868.582206853
NVU.UN-TNORTHVIEW APARTMENT REAL EST71.0260225.4123.03016.865972.81751314.08765384#N/A N/A

Source: Bloomberg

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