The S&P/TSX Composite climbed a healthy 2.0 per cent for the trading week ending with Thursday’s close and stands a nice 20.4 per cent higher for 2019.
The strong rally has, however, pushed the benchmark into technically overbought territory according to Relative Strength Index (RSI).
The TSX’s current RSI level of 70.3 puts it above the RSI sell signal of 70, indicating a higher probability of a temporary pullback.
There are 10 index members trading with oversold, technically attractive RSIs below the buy signal of 30. There is an interesting consumer staples and dividend stock bias in this week’s oversold list. Maple Leaf Foods Inc. is the most oversold benchmark stock, and Emera Inc., George Weston Ltd., and Artis REIT are also on the list.
The list of overbought, technically vulnerable stocks is far larger at 43 companies, as we’d expect after the big move higher.
IA Financial Inc. is the most overbought stock in the index, followed by Toromont Industries Ltd. and National Bank of Canada.
Other prominent names on the overbought list include Power Financial Corp., Manulife Financial Corp. and Canadian National Railways.
There are 21 index constituents showing strong price momentum by hitting new 52-week highs this week and they are ranked by market capitalization below.
Royal Bank of Canada is the largest stocks making new highs, followed by Brookfield Asset Management Inc., Manulife Financial Corp., Sun Life Financial Inc., and National Bank of Canada.
Only one S&P/TSX Composite stock is hitting new lows - Canopy Growth Corp.