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The S&P/TSX Composite Index eased higher by 0.6 per cent for the trading week ending with Thursday’s close and stands a mediocre 1.9 per cent higher year to date. In technical terms, the benchmark remains in neutral territory according to Relative Strength Index (RSI), with a reading of 53 that is roughly mid-way between the RSI buy signal of 30 and the overbought sell signal of 70.

There are nine index members trading at oversold, technically-attractive levels by RSI this week, led by CI Financial Corp. Martinrea International Inc., Linamar Corp., Russell Metals Inc., Corus Entertainment Inc., and Manulife Financial Corp.

I chose Corus Entertainment Inc. (CJR-B-T) for the focus chart this week largely because most of the other stocks on the oversold list had been featured in recent months in this column. Unfortunately, there’s not much to see. After some early success in late 2016, RSI buy signals have had little impact on price performance.

A late October buy signal was by far the most successful in uncovering a profitable entry point in the past two years. The stock rallied 24 per cent to Jan. 17, 2017. After that, RSI buy signals in September 2017, January 2018 and March 2018 were merely followed by further sell-offs.

An April 2018 buy signal offered some marginal degree of hope – the stock rallied 26 per cent between April 3 and April 6 – but quickly fell back.

There could be good fundamental reasons for Corus Entertainment stock to rally from here – fundamental research should be completed before any market transactions – but the price will have to show more stability before technical signals can be depended upon.

There are 11 overbought, technical vulnerable index constituents by RSI this week. Firstservice Corp. is the most extended stock, followed by Quebecor Inc., Franco-Nevada Corp., Detour Gold Corp., Descartes Systems Group and Kirkland Lake Gold Ltd.

RSI chart for Corus Entertainment.Livingston, Gillian

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

Most oversold stocks
TickerCompanyRSIPrice ($)200DMAReturn 1W (%)Return YTD (%)PE Ratio TTMPE Ratio Fwd
CIX-TCI FINANCIAL CORP.18.6923.0527.61-2.29-20.5010.989.55
MRE-TMARTINREA INTERNATIONAL INC.19.4413.3414.83-5.52-16.406.335.82
LNR-TLINAMAR CORP.22.2154.7970.86-2.20-24.906.525.66
RUS-TRUSSEL METALS INC.25.0926.6229.01-1.30-6.3912.2410.28
CJR-B-TCORUS ENTERTAINMENT INC.27.534.818.963.89-55.484.13N/A
MFC-TMANULIFE FINANCIAL CORP.29.1723.5125.30-0.51-8.7310.318.84
PWF-TPOWER FINANCIAL CORP.29.7130.7233.760.92-8.5612.069.08
AC-TAIR CANADA29.8721.0024.881.01-18.865.797.04
MG-TMAGNA INTERNATIONAL INC.29.9076.5973.29-1.818.749.328.12
Most overbought stocks
TickerCompanyRSIPrice ($)200DMAReturn 1W (%)Return YTD (%)PE Ratio TTMPE Ratio Fwd
FSV-TFIRSTSERVICE CORP.81.10101.1889.011.6915.4948.2429.75
QBR-B-TQUEBECOR INC.80.4527.8724.384.3417.9918.4415.67
FNV-TFRANCO-NEVADA CORP.74.2798.1095.522.24-1.6963.2964.74
DGC-TDETOUR GOLD CORP.73.6712.5912.835.44-14.8220.8215.76
DSG-TDESCARTES SYSTEMS GROUP73.2543.1536.931.6520.7384.5828.98
KL-TKIRKLAND LAKE GOLD LTD.73.0128.8920.186.3350.2423.6120.20
MAXR-TMAXAR TECHNOLOGIES LTD.72.3070.0970.037.50-12.3831.6611.89
AEM-TAGNICO EAGLE MINES LTD.72.2862.6956.255.918.5948.8280.84
ALA-TALTAGAS LTD.71.4627.5126.984.240.2642.9219.01
CAR-UN-TCAN APARTMENT PROPERTIES REIT70.7543.4937.142.3318.5430.22 N/A
EMA-TEMERA INC.70.4842.7344.11-0.02-6.6237.3514.97

Source: Bloomberg

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

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