The S&P/TSX Composite jumped another 3.8 per cent for the trading week ending with Thursday’s close and now sits lower by only 12.4 per cent for 2020.
The benchmark is in the technically neutral range – neither overbought or oversold – with a Relative Strength Index (RSI) reading of 56 that is only marginally closer to the RSI sell signal of 70 than the oversold buy signal of 30.
There are no benchmark members trading at technically attractive, oversold levels, according to RSI, for the second week in a row. Hexo Corp. and Gildan Activewear Inc. are closest with RSIs at 40.
There aren’t that many index companies – only six - trading at overbought, technically vulnerable levels this week either. CargoJet Inc. is the most overbought stock in the benchmark, followed by Celestica Inc., Stars Group Inc., Kinaxis Inc., Tourmaline Oil Corp. and Badger Daylighting Ltd.
The current environment – with few stocks trading at technical extremes – is usually indicative of churn, where previous winners fall back and the losers (in this case oil stocks) recover a bit. If it continues, investors can look for a switch in terms of sectors driving overall index returns.
There is one S&P/TSX Composite stock showing strong price momentum by forming new 52-week highs – Stars Group Inc. There is also a single company hitting new 52-week lows and that is Fairfax Financial Holdings Ltd., which is down 37 per cent year to date.
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