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The S&P/TSX Composite climbed 0.67 per cent for the trading week ending with Thursday’s close and the benchmark stands 2.6 per cent higher year to date. In terms of technical analysis, the index has a Relative Strength Index (RSI) reading of 49.5 which is about mid-point between the buy signal of 30 and the RSI sell signal of 70.

There are 19 oversold, technically attractive benchmark member stock by RSI this week. The list is once again dominated by precious metals names as IAMGOLD Corp., Osisko Gold Royalties Ltd., MAG Silver Corp., Agnico Eagle Mines Ltd., Novagold Resources Inc. and Alamos Gold Inc. (A) are the most oversold stocks in the index.

Gold stocks will be driven more by the commodity price than technical factors so I picked Tim Hortons owner Restaurant Brands International Inc. as the focus chart this week.

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RSI buy signals have worked reasonably well, but certainly not perfectly, in uncovering profitable buying opportunities for Restaurant Brands. A buy signal on June 12, 2017 ,was followed by a 9-per-cent rally in the following two weeks, but the price quickly reversed course and erased the gains.

Another buy signal in December of 2017 didn’t work at all – the stock went sideways briefly before heading distinctly south. In February, 2018, a buy signal predicted a 7-per-cent rally but again, selling pressure pushed the stock lower immediately afterwards.

The most lucrative buy signal was in April of 2018. The price hit oversold levels on April 17 and then jumped 24 per cent to July 19.

The technical attractiveness of Restaurant Brands stock now is not clear cut. Buy signals have had mixed success in the past 24 months. This case, I think, depends on fundamental research and the forward profit outlook. Technical analysis should only be used as a final step in the investment decision as to whether to buy or not.

There are 15 overbought, technically vulnerable stocks according to RSI this week. Enercare Inc. is the most overbought stock in the index, followed by Ensign Energy Services Inc., CIBC, Canopy Growth Corp. and Gibson Energy.

NAME RSI Price 200-day MA Return 1W % Return YTD % PE RATIO TTM PE RATIO FWD
IMG-T IAMGOLD CORP 17.35602 5.14 7.18145 -3.201507 -29.87722 35.19576287 26.24189592
OR-T OSISKO GOLD ROYALTIES LTD 19.02327 10.32 13.18485 -1.05465 -28.34778 221.4877387 69.26174497
MAG-T MAG SILVER CORP 20.03597 9.66 13.81273 -6.213592 -37.75773 #N/A N/A #N/A N/A
AEM-T AGNICO EAGLE MINES LTD 21.68159 45.38 55.81475 -0.1759789 -21.39511 59.90577112 66.96077667
NG-T NOVAGOLD RESOURCES INC 21.87225 4.53 5.4541 -6.016598 -8.299595 #N/A N/A 65.45543013
AGI-T ALAMOS GOLD INC-CLASS A 21.88204 5.55 7.23945 -1.769912 -32.11581 69.66777478 19.31940073
THO-T TAHOE RESOURCES INC 21.9529 4.7 6.008575 -3.885481 -22.05639 #N/A N/A 21.55285144
K-T KINROSS GOLD CORP 22.12481 3.78 4.94295 1.886792 -30.2583 14.86578159 19.69236214
MAXR-T MAXAR TECHNOLOGIES LTD 22.13885 44.61 67.54105 -10.81567 -44.22968 43.73082818 7.503396936
SSL-T SANDSTORM GOLD LTD 22.28851 4.67 5.9186 0.4301075 -25.63694 95.84330238 45.8506637
NGD-T NEW GOLD INC 22.72713 1.3 3.177775 0.7751938 -68.523 5.962047593 34.32959683
WPM-T WHEATON PRECIOUS METALS CORP 23.16461 23.06 26.9941 -0.6890612 -16.3141 21.56449143 28.95028321
SSRM-T SSR MINING INC 25.27657 11.12 12.04115 0.270514 0.4516712 43.97149021 45.53931874
TSGI-T STARS GROUP INC/THE 25.63747 35.71 37.56665 -3.277356 22.08547 18.10359395 14.31791671
QSR-T RESTAURANT BRANDS INTERN 28.15403 76.62 77.049 -7.284608 0.711402 23.66514032 21.78050299
FNV-T FRANCO-NEVADA CORP 29.01286 85.79 94.4992 0.8819379 -14.02467 54.07258443 56.24930667
G-T GOLDCORP INC 29.04215 14.11 17.09558 3.143275 -11.7228 #N/A N/A 20.62144411
FR-T FIRST MAJESTIC SILVER CORP 29.45907 6.84 8.52675 2.242152 -19.33962 #N/A N/A 57.56228933
PBH-T PREMIUM BRANDS HOLDINGS CORP 29.72819 97.93 109.304 -2.353176 -4.285143 33.32664066 20.92521368
NAME RSI Price 200-day MA Return 1W % Return YTD % PE RATIO TTM PE RATIO FWD
ECI-T ENERCARE INC 91.8617 28.85 19.4249 0.06937218 45.60626 42.62517971 33.54651163
ESI-T ENSIGN ENERGY SERVICES INC 78.9951 7.06 6.27575 10.48513 13.64964 19.41779601 #N/A N/A
CM-T CAN IMPERIAL BK OF COMMERCE 76.43332 122.4 116.762 1.576764 2.235416 10.3280612 9.89010989
WEED-T CANOPY GROWTH CORP 76.03252 54.3 31.5477 33.48083 82.58238 #N/A N/A #N/A N/A
GEI-T GIBSON ENERGY INC 75.15257 19.94 17.46475 1.218274 14.0358 132.6600572 39.64214712
EXE-T EXTENDICARE INC 74.81728 8.45 8.3159 3.04878 -4.334908 29.84842584 26.40625
AC-T AIR CANADA 73.7622 26.77 24.35425 12.14914 3.438949 9.41198161 8.646640827
CWB-T CANADIAN WESTERN BANK 73.7447 38.64 36.13015 4.885993 -0.1593198 13.57009332 12.35294118
BEI-UN-T BOARDWALK REAL ESTATE INVEST 73.57996 51.6 44.64875 1.674877 21.29071 16.29085571 #N/A N/A
BBU-UN-T BROOKFIELD BUSINESS PT-UNIT 73.53714 57.04 47.40245 5.62963 32.20058 #N/A N/A 8.684301253
RBA-T RITCHIE BROS AUCTIONEERS 72.85551 49.9 41.26895 0.0601564 33.95232 38.6338751 31.01795678
ATA-T ATS AUTOMATION TOOLING SYS 70.92254 21.55 17.78085 0.6539 38.58521 34.20862857 21.55
CPX-T CAPITAL POWER CORP 70.89616 27.46 24.70755 1.030169 15.94914 26.18282697 20.25073746
CP-T CANADIAN PACIFIC RAILWAY LTD 70.62507 268.22 235.4465 1.829916 17.40022 22.38290958 18.60958857
CAR-UN-T CAN APARTMENT PROP REAL ESTA 70.29158 46.57 38.85825 -0.491453 27.25833 28.31784559 #N/A N/A

Source: Scott Barlow; Bloomberg

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