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The S&P/TSX Composite fell 1.7 per cent for the trading week ending with Thursday's close, but, despite the magnitude of the decline, there are surprisingly few oversold index stocks this week.

The benchmark's Relative Strength Index (RSI) of 40.2 is still above the buy signal of 30, that would indicate is was oversold. The RSI sell signal of 70 is a long way away.

I expected a lot more than 11 oversold index constituents, but that's what we have this week. Aecon Group Inc. is the most oversold stock in the benchmark, followed by Hudson's Bay Co., Labrador Iron Ore Royalty Co., Uni-Select Inc., Eldorado Gold Corp. and Maxar Technologies Ltd..

I picked Hudson's Bay Co. as the focus chart, and I don't think we've looked at one like it in this column before. The stock price has been in a steady decline in the past two years, as indicated by the falling 200-day moving average trend line, but RSI buy signals have actually worked pretty well. This is not a great stock for investing, according to the chart, but might be tradeable.

An RSI buy signal in May of 2016 forecast a 25-per-cent price rally to mid-August 2016 but another buy signal in November 2016 marked only a quick pause before further price declines. A January 2017 buy signal led to a 34-per-cent rally (from very low price levels) before the stock rolled over again. A similar pattern – significant rally then decline – occurred between March and June 2017. The June 2017 buy signal led to the most profitable rally on the chart of 57 per cent to September of the same year.

RSI buy and sell signals have worked well for Hudson's Bay stock over the last two years but the longer term downtrend makes it look too dangerous to trade unless a market participant is willing to stare at their quote screen constantly with their finger hovering over the sell button.

Fundamental research could uncover a much more optimistic scenario for Hudson's bay and investors should always complete fundamental analysis before making any transaction.

There are only two S&P/TSX Composite stocks trading at overbought, technically vulnerable levels according to RSI this week – Dream REIT and Premium Brands Holdings Corp.

ARE-TAECON GROUP INC20.8859618.117.86255-2.331188-8.60080135.6187035218.00995025
HBC-THUDSON'S BAY CO23.730978.7311.0287-5.926729-22.60639#N/A N/A#N/A N/A
LIF-TLABRADOR IRON ORE ROYALTY CO24.9080522.8321.12736-3.954565-16.066189.28424298610.3163127
UNS-TUNI-SELECT INC26.2844321.0127.12687-4.0201-26.0471613.4795883611.96213635
ELD-TELDORADO GOLD CORP26.84551.22.21045-14.89361-34.0659371.857708530.15242035
MAXR-TMAXAR TECHNOLOGIES LTD27.7456856.272.1528-2.090591-30.1223228.449194299.662887139
ATD.B-TALIMENTATION COUCHE-TARD -B28.4848957.4362.2795-10.20951-12.4409218.1331688715.12318529
CUF.UN-TCOMINAR REAL ESTATE INV-TR U28.5399512.9413.64715-1.820944-8.9289889.430833565#N/A N/A
CCA-TCOGECO COMMUNICATIONS INC29.3111769.2984.5273-2.805441-19.3901911.2165153111.35715456
CWB-TCANADIAN WESTERN BANK29.4005334.1733.3637-1.838557-12.3174512.6413824811.17396991
EFN-TELEMENT FLEET MANAGEMENT COR30.862174.038.595554.134372-57.578958.5197607915.790229885
DRG.UN-TDREAM GLOBAL REAL ESTATE INV78.8337213.611.50151.41685612.499819.53290559#N/A N/A
PBH-TPREMIUM BRANDS HOLDINGS CORP75.06934114.9100.69963.87849311.3803840.8426893626.43202208

Source: Bloomberg/Scott Barlow