The S&P/TSX Composite climbed an impressive 3.5 per cent for 2021′s first trading week ending with Thursday’s close.
The rally leaves the benchmark firmly in overbought territory according to Relative Strength Index (RSI) as the current reading of 72 is above the sell signal of 70.
There are, predictably, a large number of index constituents (35) trading at frothy, overbought levels.
Energy stocks top the list of most overbought companies as Husky Energy Inc., Innergex Renewable Energy Inc., TransAlta Corp. and Transalta Renewables Inc. are the most extended stocks in the benchmark.
The market rotation to economically sensitive equity assets is clear in the overbought list this week as it’s difficult to find stocks not from commodities, industrials or banks sectors.
There is one S&P/TSX Composite company, Emera Inc., that finished the week with a technically attractive, oversold RSI below the buy signal of 30 after the utility fell more than four per cent. Chartwell Retirement Residences is right on the border of oversold with an RSI at 30.
There are 26 benchmark stocks showing strong price momentum by hitting new 52-week highs and they are ranked by market capitalization in the table below. Canadian Pacific Railway Ltd., Brookfield Renewable Partners LP and First Quantum Minerals Ltd. are the three largest companies making new highs.
There are no index stocks hitting new 52-week lows.
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Scott Barlow