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The S&P/TSX Composite Index popped 0.94 per cent for the trading week ending with Thursday's close and stands lower by 2.8 per cent so far in 2018. In terms of Relative Strength Index (RSI), the current reading of 54.3 puts the benchmark in technical neutral territory between the RSI buy signal of 30 and the overbought sell signal of 70.

The equity rally left only six index constituents trading at oversold, technically attractive levels according to RSI. PrairieSky Royalty Ltd. is the most oversold stock in the benchmark, followed by Element Fleet Financial Corp., MAXAR Technologies Ltd., Canadian Western Bank, Uni-Select Inc. and Aecon Group Inc.

I chose Aecon Group for this week's focus chart.

RSI buy signals have worked well for Aecon stock in the past two years. A November, 2016, buy signal was followed by a 31-per-cent price rally to March 16, 2017. A May, 2017, buy signal led to a smaller 6.7-per-cent rally in the following two months. The most lucrative RSI buy signal occurred in August of 2017 as the stock appreciated 33 per cent to Nov. 1.

Aecon's price has been frequently sensitive to the 200-day moving average trend line. The 200-day line acted as resistance in February, 2017 , and also in June and July of the same year. The trend line acted as price support in October, 2017.

It's a good sign that Aecon's stock price remains above the 200-day moving average but it's not so great that the most recent RSI buy signal, in February, was not followed by any significant rally.

Fundamental research is important in the case of Aecon, as the price can swing dramatically based on new contract signings, and this information has not been evident in the stock price.

There are 13 overbought, technically vulnerable stocks according to RSI this week, led by Dream Global REIT. Stars Group Inc., Waste Connections Inc., Northview Apartment REIT, Celestica Inc. and Air Canada follow close behind.

RSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio Fwd
PSK -TPRAIRIESKY ROYALTY LTD20.2506126.6430.6542-4.310347-16.5592352.35303593105.2964427
EFN -TELEMENT FLEET MANAGEMENT COR22.969243.878.7309-21.65992-59.263168.1815065935.600578871
MAXR -TMAXAR TECHNOLOGIES LTD25.7839757.472.29985-9.972903-28.6302728.7296092210.37974684
CWB -TCANADIAN WESTERN BANK29.5532534.8133.1157-2.746182-10.6751612.8781552611.38325703
UNS -TUNI-SELECT INC30.4363921.8927.346530.04570105-22.9496713.7917296812.2400844
ARE -TAECON GROUP INC30.9143718.6617.7757-0.8501602-6.41925936.7207175821.01351351
NAMERSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio Fwd
DRG.U -TDREAM GLOBAL REAL ESTATE INV81.8079113.4111.42812.83742210.9281119.26001865#N/A N/A
TSGI -TSTARS GROUP INC/THE77.8506637.7226.90141.37060328.9572723.4122194611.85917078
WCN -TWASTE CONNECTIONS INC76.3885496.4286.706722.7165218.35348340.5019740329.69205688
NVU.U -TNORTHVIEW APARTMENT REAL EST74.72252623.24461.0493595.20485414.41274441#N/A N/A
CLS -TCELESTICA INC73.6474814.7814.860254.82269312.139610.8376044310.07642149
AC -TAIR CANADA73.388128.1123.274553.9955638.6166946.8413620838.926643379
SHOP -TSHOPIFY INC - CLASS A72.55825192.86136.34211.58011251.72685#N/A N/A1446.327817
DSG -TDESCARTES SYSTEMS GRP/THE72.4831237.4634.626952.2379894.81253274.6376195328.74070142
CIGI -TCOLLIERS INTERNATIONAL GROUP70.9969286.9172.07712.99834514.5512133.6661013619.43875258
OTEX -TOPEN TEXT CORP70.9913147.2942.245451.6770616.17446838.682353813.20211464
GIB.A -TCGI GROUP INC - CLASS A70.4987676.6867.482450.643129412.269419.7750932118.05084746
BNS -TBANK OF NOVA SCOTIA70.4710482.179.859352.5737111.20808512.3928285911.52280702
MSI -TMORNEAU SHEPELL INC70.1467824.9121.626-0.95427512.3333930.8521177225.08559919