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The S&P/TSX Composite Index climbed another 2.1 per cent for the trading week ending with Thursday’s close, which does not leave us a lot of oversold, technically attractive index members to talk about this week. The benchmark itself has a Relative Strength Index (RSI) of 66.9, which is bumping up against the RSI overbought sell signal of 70 and nowhere close to the buy signal of 30.

There are two attractive oversold stocks in the benchmark according to RSI – MEG Energy Corp. and bus manufacturer NFI Group Inc. MEG Energy is an investment banking, not trading story (although it’s notable that RBC Capital Markets upgraded its rating on the stock to buy Thursday with a $7.50 target), which leaves NFI.

The stock is a case where RSI buy signals have worked much better when the price is above the 200-day moving average trend line. A buy signal in July 2017 was followed by a small gain but another in November 2017 led to a quick 26-per-cent gain by the end of March 2018.

NFI’s price fell below the 200-day moving average in May of 2018 and never really recovered – RSI buy signals in May and June 2018 were ineffective. NFI spent much of the fourth quarter of 2018 in oversold territory but no rally has yet transpired.

There is, unfortunately, little reason to trust the current oversold RSI buy signal. As always, there could be a compelling fundamental investment case for NFI, and investors should always complete fundamental research before making any investment decisions.

There are 15 overbought, technically vulnerable S&P/TSX member stocks this week by RSI. Badger Daylighting Ltd. is the most overbought stock in the index, followed by Cogeco Communications Inc., Parex Resources Inc., Granite REIT, Canopy Growth Corp., Enbridge Inc., and Extendicare Inc. The full table of overbought stocks is in the table below.

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RSI NFI Inc.

TSX oversold and overbought stocks

Most oversold stocks on the TSX
Company Ticker RSI Price 200DMA 1 Wk Return (%) YTD Return (%) PE Ratio TTM PE Ratio Fwd
MEG ENERGY CORP MEG-T 23.68 5.42 8.58 -33.66 -28.66 N/A N/A
NFI GROUP INC NFI-T 29.03 29.48 47.59 -16.96 -14.98 8.28 8.46
Most overbought stocks on the TSX
Company Ticker RSI Price 200DMA 1 Wk Return (%) YTD Return (%) PE Ratio TTM PE Ratio Fwd
BADGER DAYLIGHTING LTD BAD-T 76.36 36.4 29.35 2.37 12.62 17.68 16.47
COGECO COMMUNICATIONS INC CCA-T 75.22 74.74 67.23 8.70 13.41 10.30 12.11
PAREX RESOURCES INC PXT-T 74.79 19.87 20.45 10.08 21.53 4.49 N/A
GRANITE REAL ESTATE INVESTME GRT-UN-T 74.67 57.81 53.65 2.11 9.15 19.39 N/A
CANOPY GROWTH CORP WEED-T 73.50 59.37 44.05 14.35 55.61 N/A N/A
ENBRIDGE INC ENB-T 72.38 47.71 43.15 3.22 11.72 14.82 20.27
EXTENDICARE INC EXE-T 72.28 7.41 7.53 10.53 15.75 25.28 N/A
MTY FOOD GROUP INC MTY-T 71.93 68.01 57.91 5.72 13.14 24.94 21.06
LOBLAW COMPANIES LTD L-T 71.52 64.35 55.29 2.24 5.22 20.43 14.43
HUDBAY MINERALS INC HBM-T 71.26 7.53 7.15 6.56 15.63 7.32 24.47
METRO INC MRU-T 71.19 49.34 43.03 2.87 3.68 20.35 16.96
INTERTAPE POLYMER GROUP INC ITP-T 71.14 19.02 18.23 2.76 12.41 12.02 12.32
RITCHIE BROS AUCTIONEERS RBA-T 71.09 47.4 44.97 2.58 6.07 32.59 26.78
PASON SYSTEMS INC PSI-T 70.70 20.84 20.05 5.21 14.93 38.59 23.28
HUSKY ENERGY INC HSE-T 70.36 17.18 19.03 16.10 23.67 9.10 18.35

Source: Bloomberg

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 24/05/24 4:00pm EDT.

SymbolName% changeLast
NFI-T
Nfi Group Inc.
+0.2%14.97

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