Energy companies dominate the overbought list this week, while perpetually oversold Catamaran Corp. is starting to look interesting.
Petrominerales Ltd. and Transglobe Energy Corp. are now the two most overbought, technically extended members of the S&P/TSX Composite, according to Relative Strength Index readings.
Brookfield Office Properties Inc. has popped onto the overbought list, on news that it will be acquired by another arm of the sprawling Brookfield Asset Management behemoth. Other new entries on the overbought list include ATS Automation Tooling Systems Inc., Valeant Pharmaceuticals International Inc., Pason Systems Inc. and real estate developer Dream Unlimited Corp.
The oversold list is where the investment opportunities usually lie, so the lack of movement is a bit disappointing. Reitmans (Canada) Ltd. and Cameco Corp. are still below the 30 mark for RSI, which signals oversold. Empire Co. Ltd., NuVista Energy Ltd. and Metro Inc. managed to escape oversold territory.
Technically speaking, health services provider Catamaran Corp looks like an interesting case and the featured chart for the week (though as always, investors will need to do more fundamental research on their own before buying.) The stock is deeply oversold and approaching the lows of last November, around $46.
I'm also curious to see what happens next week with Manitoba Telecom Services Inc. The stock is just barely above oversold levels and the 5.2 per cent indicated dividend yield is starting to look juicy.
The usual warnings apply. I'm using the fourteen-day RSI readings, and the numbers change quickly. On its own, technical analysis like this is never sufficient grounds for buying stock. (You can read more on this technical indicator and how it's calculated here.)
To see the charts on your mobile device, click on the following links:
S&P/TSX Overbought (RSI) stocks - Oct. 4/13: http://bit.ly/1bx0fLs
S&P/TSX Oversold (RSI) stocks - Oct. 4/13: http://bit.ly/18XSURr
Catamaran stock price vs RSI: http://tgam.ca/DvPz
Scott Barlow