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The S&P/TSX Composite climbed another 1.0 per cent for the week ending with Thursday’s close and remains in frothy, overbought territory according to Relative Strength Index (RSI).

The benchmark’s RSI of 74 is well above the sell signal of 70.

There are only two index members trading at technically attractive, oversold RSI levels below the buy signal of 30. Crescent Point Energy Corp. is the most oversold stock in the index, followed by SNC-Lavalin Group Inc.

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I chose SNC-Lavalin for the focus chart this week.

Under normal circumstances I wouldn’t pick a company with this much headline risk, but SNC has endured poor news flow in the recent past and the chart might provide some guidance.

The stock price has been generally sensitive to RSI buy signals and the 200-day moving average trend line in the past 36 months. A buy signal in September 2016 turned out to be a profitable entry point as the price rose 12 per cent before mid-January 2017.

A buy signal in February 2017 was followed by a smaller rally, and another in May of the same year forecast another 12-per-cent jump to July 14.

Buy signals started working less well after the price moved below the 200 day moving average in August of 2018. August and September buy signals in 2018 did mark stabilization in the price after a downdraft but no rally occurred. The same thing happened in October – selling pressure eased after a buy signal but no rally.

The 200-day moving average trend line also appears to have played a role in trading activity. The orange line on the chart acted as resistance to further gains in the February to May time frame. From February to June 2018, the trend line seems to have supported the price and prevented deeper corrections. The 200 day also provided support in July 2018.

The most recent slide for SNC stock was severe and the price is now well below the 200-day moving average. Based on recent history, the most likely scenario is for the price to stabilize in the current range, but there’s little to suggest and upurge at this point.

As always, this column is discussing technical views only and fundamental analysis should be completed before any transactions.

There are 40 overbought S&P/TSX Composite stocks this week, led by Choice Property REIT. Northland Power is next on the overbought list, followed by Transalta Renewables Inc., Brookfield Property Partners, Artis REIT, Intact Financial Corp. and Labrador Iron Ore Royalty Co

NAME RSI 14D px last MOV_AVG_200D LAST_CLOSE_TRR_1WK LAST_CLOSE_TRR_YTD PE_RATIO BEST_PE_RATIO
CPG-T CRESCENT POINT ENERGY CORP 26.37677 3.37 7.4475 -14.03061 -18.59903 30.67289122 14.46351931
SNC-T SNC-LAVALIN GROUP INC 29.12595 36.91 51.5386 0.9297238 -19.62108 14.19006843 32.49119718
NAME RSI 14D px last MOV_AVG_200D LAST_CLOSE_TRR_1WK LAST_CLOSE_TRR_YTD PE_RATIO BEST_PE_RATIO
CHP-UN-T CHOICE PROPERTIES REIT 84.41591 13.22 12.1262 3.200624 15.31198 9.208706244 #N/A N/A
NPI-T NORTHLAND POWER INC 83.34773 25.09 22.856 5.111018 16.10916 19.47562531 #N/A N/A
RNW-T TRANSALTA RENEWABLES INC 82.40237 12.24 11.6382 4.974271 18.86347 15.68392253 #N/A N/A
BPY-UN-T BROOKFIELD PROPERTY PARTNERS 82.08815 26.29 24.95995 9.908027 19.39146 #N/A N/A #N/A N/A
AX-UN-T ARTIS REAL ESTATE INVESTMENT 80.98517 10.82 11.7444 5.974535 17.61618 8.79717685 #N/A N/A
IFC-T INTACT FINANCIAL CORP 80.74741 110.99 100.6938 6.865011 11.89636 21.66992094 14.8820059
LIF-T LABRADOR IRON ORE ROYALTY CO 80.5955 32.21 25.11317 6.163481 32.87954 16.69772711 9.202857143
FSV-T FIRSTSERVICE CORP 80.3643 112 100.8002 4.918033 19.54317 44.24676887 27.79297488
X-T TMX GROUP LTD 79.19213 82.41 81.41985 4.105609 16.5135 17.35906031 15.38361023
SSL-T SANDSTORM GOLD LTD 78.5898 7.12 5.62635 3.338171 12.65823 95.58412089 67.07363
KL-T KIRKLAND LAKE GOLD LTD 78.36303 43.37 28.1103 2.602319 21.82584 29.29811056 20.06458317
ECN-T ECN CAPITAL CORP 78.18984 3.97 3.57695 3.926702 15.07246 17.51779023 15.50225948
FCR-T FIRST CAPITAL REALTY INC 78.00354 21.23 20.10335 3.460039 12.62599 21.53788359 #N/A N/A
AC-T AIR CANADA 77.91652 31.18 25.2602 5.089316 20.10786 12.7134022 8.196635121
QBR-B-T QUEBECOR INC -CL B 77.43443 31.63 27.1212 2.263175 10.05567 20.50207008 16.56888423
L-T LOBLAW COMPANIES LTD 76.00307 66.54 56.21937 4.573315 8.885616 21.12664682 14.92262839
CAR-UN-T CAN APARTMENT PROP REAL ESTA 75.28896 48.75 44.5708 4.166667 10.31106 29.22646101 #N/A N/A
WCN-T WASTE CONNECTIONS INC 75.00988 111.34 101.2346 1.541268 9.878614 40.31295313 31.11229691
TSX-I S&P/TSX COMPOSITE INDEX 74.16192 15703.36 15697.05 1.049933 9.876816 17.22779413 14.36189339
RY-T ROYAL BANK OF CANADA 74.03337 101.4 99.16235 1.379724 9.596873 11.88526866 11.23794747
ASR-T ALACER GOLD CORP 74.00761 3.35 2.4125 10.56106 32.93651 63.86988764 6.407821265
GRT-UN-T GRANITE REAL ESTATE INVESTME 73.0641 60.01 54.32265 0.7386268 13.22343 20.12729004 #N/A N/A
ENB-T ENBRIDGE INC 72.91578 49.31 43.7569 2.707769 16.26975 15.32181128 20.80590717
INE-T INNERGEX RENEWABLE ENERGY 72.77899 14.57 13.2976 1.32128 16.1882 56.2946008 #N/A N/A
TA-T TRANSALTA CORP 72.77198 7.39 6.94485 3.06834 32.20036 #N/A N/A #N/A N/A
WN-T WESTON (GEORGE) LTD 72.42268 97.88 99.36022 2.55658 8.695169 24.45806989 14.09968309
FTS-T FORTIS INC 72.41077 47.92 43.48965 2.262057 5.295539 18.3312019 18.14464218
BAM-A-T BROOKFIELD ASSET MANAGE-CL A 72.19524 58.15 54.69175 2.847542 11.14297 16.06132399 #N/A N/A
TD-T TORONTO-DOMINION BANK 72.11469 74.57 74.50735 0.7702703 10.9685 11.73630037 10.75735718
SIA-T SIENNA SENIOR LIVING INC 72.07053 17.72 16.86115 2.546296 13.07897 46.53361164 #N/A N/A
PPL-T PEMBINA PIPELINE CORP 71.87888 47.37 44.48485 1.174712 17.43663 19.26464875 17.50554324
WPM-T WHEATON PRECIOUS METALS CORP 71.83937 27.94 25.12355 0.9393064 4.840525 35.0380741 45.97510481
OR-T OSISKO GOLD ROYALTIES LTD 71.75073 12.83 11.44855 -0.2332815 7.184628 300.4683823 70.8839779
SSRM-T SSR MINING INC 71.72418 18.24 13.718 1.220866 10.54545 60.30322543 69.42588873
TRI-T THOMSON REUTERS CORP 71.28918 70.39 58.87117 2.445059 6.76475 61.93000139 59.40476887
AQN-T ALGONQUIN POWER & UTILITIES 71.26814 14.85 13.3239 2.343212 8.15732 17.99550127 19.46347641
HBM-T HUDBAY MINERALS INC 71.26551 7.97 7.0463 1.270648 23.37461 7.74282747 36.40291665
CSH-UN-T CHARTWELL RETIREMENT RESIDEN 71.13191 15.1 14.78705 2.861035 10.82807 60.07870063 #N/A N/A
IIP-UN-T INTERRENT REAL ESTATE INVEST 70.98646 14.16 11.821 5.514158 8.701731 8.270902339 #N/A N/A
CPX-T CAPITAL POWER CORP 70.94299 29.78 26.96485 3.546592 11.99699 23.88577873 13.1016278
AP-UN-T ALLIED PROPERTIES REAL ESTAT 70.9387 47.86 43.5401 1.398305 8.293271 27.45804307 #N/A N/A

Source: Bloomberg/Scott Barlow

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