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The S&P/TSX Composite eased lower by 0.46 per cent for the trading week ending with Thursday’s close. Relative Strength Index (RSI) shows the index to be in the technically neutral range with a reading of 54 that is roughly half way between the oversold buy signal of 30 and the frothy overbought RSI sell signal of 70.

There are 13 oversold, technically attractive benchmark members according to RSI this week and the list is dominated by precious metals names. Barrick Gold Corp. is the most oversold stock in the index with New Gold Inc., Corus Entertainment Inc., and Centerra Gold Inc. close behind.

I picked First Capital Realty Inc. as the focus stock this week. First Capital is one of the least volatile stocks I’ve seen in the domestic market, but the price has been sensitive to RSI buy and sell signals in the past two years.

First Capital was deeply oversold in November 2016 and a 10.1 per cent rally followed immediately. It was also oversold at the end of June 2017 and rallied 5.6 per cent in the month afterwards. The price again represented significantly oversold levels in February of this year, and an 11.3 per cent rally occurred to recent May highs.

Based on technicals alone (investors should always complete fundamental research before making any transactions) a price rebound for First Capital is a reasonable expectation in the weeks ahead, although the gains may not be huge given the general lack of volatility in the price over the past 24 months.

There are 10 overbought, technically vulnerable S&P/TSX Composite companies by RSI this week, led by Firstservice Corp. Toromont Industries Ltd is next in line and widely held Transalta Corp. and Canadian National Railway Co. are also on the overbought list.

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Livingston, Gillian

Scott Barlow, Globe Investor’s in-house market strategist, writes exclusively for our subscribers at Inside the Market.

This week's most oversold and overbought stocks on the TSX

Most oversold stocks
RSI Price ($) 200DMA Return 1W (%) Return YTD (%) PE Ratio TTM PE Ratio Fwd
ABX-T BARRICK GOLD CORP 17.43 14.44 17.32 -11.67 -20.08 24.85 15.43
NGD-T NEW GOLD INC 19.07 1.87 3.46 -24.40 -54.24 8.57 15.55
CJR-B-T CORUS ENTERTAINMENT INC 22.56 4.09 8.31 -4.67 -61.46 3.51 N/A
CG-T CENTERRA GOLD INC 25.28 5.79 7.15 -1.68 -9.32 5.61 6.75
FCR-T FIRST CAPITAL REALTY INC 25.95 19.86 20.51 -0.95 -2.32 24.01 N/A
IFP-T INTERFOR CORP 26.07 21.24 23.40 -14.14 0.33 12.66 9.88
OSB-T NORBORD INC 26.12 47.62 48.28 -6.84 14.60 7.32 7.87
ACB-T AURORA CANNABIS INC 26.34 6.95 8.53 -10.81 -28.65 N/A N/A
MAG-T MAG SILVER CORP 26.86 12.47 14.07 0.40 -19.85 N/A N/A
BLX-T BORALEX INC 27.98 19.65 22.45 -2.96 -15.11 56.30 N/A
PBH-T PREMIUM BRANDS HOLDINGS CORP 28.29 106.89 109.56 -5.62 4.21 38.42 24.85
G-T GOLDCORP INC 30.21 16.4 17.24 -7.40 2.60 N/A 23.85
AX-UN-T ARTIS REAL ESTATE INVESTMENT 30.33 12.79 13.70 -2.75 -6.20 9.75 N/A
Most overbought stocks RSI Price ($) 200DMA Return 1W (%) Return YTD (%) PE Ratio TTM PE Ratio Fwd
FSV-T FIRSTSERVICE CORP 82.44 111.31 90.60 7.12 26.53 49.54 29.80
TIH-T TOROMONT INDUSTRIES LTD 76.85 65.55 56.32 12.10 19.83 32.33 20.63
ARX-T ARC RESOURCES LTD 75.03 15.75 14.21 6.42 9.17 39.12 23.94
PKI-T PARKLAND FUEL CORP 74.26 35.33 28.99 3.51 34.82 33.29 N/A
TA-T TRANSALTA CORP 73.82 7.18 7.06 2.28 -2.64 N/A 156.09
AD-T ALARIS ROYALTY CORP 71.66 17.8 18.11 9.37 -9.99 48.83 N/A
CNR-T CANADIAN NATL RAILWAY CO 71.46 118.06 101.84 3.13 14.69 23.32 20.19
ASR-T ALACER GOLD CORP 71.00 2.79 2.25 4.89 25.11 5.50 28.46
MIC-T GENWORTH MI CANADA INC 70.91 45.97 41.62 1.82 7.91 9.11 9.25
AAV-T ADVANTAGE OIL & GAS LTD 70.41 4.65 4.69 10.21 -14.07 78.62 56.02

Source: Bloomberg, Scott Barlow

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