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Inside the Market The week’s most oversold and overbought stocks on the TSX

The S&P/TSX Composite rose 0.3 per cent for the trading week ending with Thursday’s close and is now 13 per cent higher for the year.

In terms of technicals, the benchmark’s Relative Strength Index (RSI) of 64 leaves it in neutral territory, although closer to the overbought RSI sell signal of 70 than the oversold buy signal of 30.

There are six index member stocks trading at attractive technical levels with RSI readings below the buy signal of 30.

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Enghouse Systems Ltd. is the most oversold company in the benchmark, followed by NFI Group Inc., Winpak Ltd., Premium Brand Holdings Corp., Cascades Inc., and Maple leaf Foods Inc.

I picked Enghouse Systems, a provider of logistics software for telecommunications and utility firms, as the focus chart this week.

Through 2016 and 2017, the stock showed very little volatility, trading within a narrow range. There was one RSI buy signal in the period, in June of 2017, and that marked a stabilizing of the price after a brief sell-off.

An investor who bought Enghouse at that time, if they were able to wait through a number of months of flat price movement, would eventually have been rewarded with a 63-per-cent rally to early September 2018.

Two RSI buy signals for the stock in October 2018 were ineffective. Another in early December did indicate a profitable 16-per-cent rally before March 6 of this year.

RSI buy signals really don’t have enough of a track record in this case to confidently buy Enghouse based on the chart. Fundamental research could potentially provide a strong bull case – investors should always make fundamental research part of their process.

There are 25 S&P/TSX Composite companies trading at overbought, technically vulnerable levels according to RSI this week. Kinder Morgan Canada Ltd. is the most extended stock in the index, followed by Tricon Capital Group Inc., Shopify Inc. (A) , Brookfield Renewable Partners, Transalta Renewables Inc. and Emera Inc.

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staff

NameRSI 14dpx lastMOV_AVG_200DLAST_CLOSE_TRR_1WKLAST_CLOSE_TRR_YTDPE_RATIOBEST_PE_RATIO
ENGH-TENGHOUSE SYSTEMS LTD26.1032632.0937.20633-16.32334-3.11825326.7751468825.94179466
NFI-TNFI GROUP INC26.51930.7443.03165-10.19573-9.6944778.9155005298.971568394
WPK-TWINPAK LTD28.2109841.5446.26010.8007765-13.0052418.517330217.96138267
PBH-TPREMIUM BRANDS HOLDINGS CORP29.072170.7691.0181-3.45204-5.4768922.1006077816.72813239
CAS-TCASCADES INC29.515018.3311.48113.44947-18.1909910.968420598.605371901
MFI-TMAPLE LEAF FOODS INC29.7229926.7530.39415-2.235551-1.59165817.8868627517.22472634
NameRSI 14dpx lastMOV_AVG_200DLAST_CLOSE_TRR_1WKLAST_CLOSE_TRR_YTDPE_RATIOBEST_PE_RATIO
KML-TKINDER MORGAN CANADA LTD83.6659615.9914.64312.1072812.2124311.6210858223.72403561
TCN-TTRICON CAPITAL GROUP INC81.2075811.5710.68472.20848119.401459.65671936811.00898448
SHOP-TSHOPIFY INC - CLASS A80.66221277.29203.10110.0662946.87748#N/A N/A575.1957106
BEP-UN-TBROOKFIELD RENEWABLE PARTNER76.9139941.6438.800351.36319419.822561321.53057930.54032199
RNW-TTRANSALTA RENEWABLES INC75.747281311.707152.41448727.8260414.1237413615.20467836
EMA-TEMERA INC75.6791848.8742.783552.02505213.2330217.2986615317.03974895
PWF-TPOWER FINANCIAL CORP74.608230.5629.197052.5847618.3120410.971765829.038745933
GEI-TGIBSON ENERGY INC74.2950123.0419.74032.58236923.3404732.2521052325.04347826
POW-TPOWER CORP OF CANADA74.0549429.6127.78243.49528122.321047.9758135989.218555417
MAG-TMAG SILVER CORP73.495814.0311.295910.1255940.3#N/A N/A#N/A N/A
NPI-TNORTHLAND POWER INC73.2705625.7422.99021.49842319.5949721.1033076417.13715047
SIA-TSIENNA SENIOR LIVING INC72.9893318.4816.95280.598802418.4303387.75970339#N/A N/A
FTS-TFORTIS INC72.9053548.8344.095651.3701478.32239319.4561838818.20656227
CU-TCANADIAN UTILITIES LTD-A72.6968335.9732.2326-0.22191416.2787714.265765716.3574352
ALA-TALTAGAS LTD72.5335917.820.045250.621820229.47124#N/A N/A18.77637131
CCA-TCOGECO COMMUNICATIONS INC72.3534984.5868.8542-0.505822829.4956811.6578810112.70160685
TRI-TTHOMSON REUTERS CORP72.2418574.3261.39921.54392713.47082184.603613951.29376712
TA-TTRANSALTA CORP71.764138.387.074153.07503150.65917#N/A N/A#N/A N/A
TRP-TTRANSCANADA CORP71.4133560.2154.998250.083111723.5076915.5905087415.70013038
CPX-TCAPITAL POWER CORP71.3691631.3927.58981.81641318.051921.5656714815.01913876
BB-TBLACKBERRY LTD70.8019312.4312.399652.22039528.01236#N/A N/A52.88677608
SMF-TSEMAFO INC70.540163.923.192758.28729232.88136#N/A N/A8.31572262
SAP-TSAPUTO INC70.429544.2941.00665-1.18250813.44226.3667212123.1400209
ACB-TAURORA CANNABIS INC70.3803911.929.012716.8627575.81121#N/A N/A#N/A N/A
OR-TOSISKO GOLD ROYALTIES LTD70.1498415.611.62297.1428630.32582655.765285770.90909091

Source: Bloomberg/Scott Barlow

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