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The S&P/TSX Composite eased higher by 0.4 per cent for the trading week ending with Thursday's close and remains in the frothy, technically vulnerable zone, according to Relative Strength Index (RSI).

The benchmark's current RSI reading of 72.3 is above the sell signal of 70.

There are a surprisingly large number of index constituents, 18, trading at oversold, technically attractive levels below the RSI buy signal of 30. Torex Gold Resources Inc., is the most oversold stock in the benchmark followed by Just Energy Group Inc., Uni-Select Inc., Linamar Corp., Enbridge and Pan American Silver Corp.

I picked Linamar as the focus chart this week as the stock got bludgeoned after reporting weaker than expected quarterly earnings.

RSI buy signals have been successful in identifying profitable entry points for Linamar in the past two years, but these buy signals have been a lot more reliable when the stock price was above the 200 day moving average trend line.

A buy signal in January 2016 didn't work well at all, but another in February 2016 was followed by a 26-per-cent rally. A buy signal in May 2016 was ineffective, but a June signal worked far better as the stock climbed 44 per cent to early December. In 2017, an April RSI buy signal predicted another rally of exactly the same 44 per cent before the stock price slide this week.

Linamar stock is currently right at its 200-day moving average. If the price can hold above this trend line, we can reasonably expect a recovery based on the past 24 months of market action. As always, fundamental research could counteract that view and investors should always complete fundamental research before making any transactions.

There are 36 companies, about 15 per cent of the benchmark, trading at overbought levels according to RSI this week. WSP Global Inc. is the most overbought stock in the S&P/TSX Composite, followed closely by Canopy Growth Corp., Cenovus Energy Inc., Industrial Alliance Insurance, Manulife Financial Corp., and MEG Energy.

NAMERSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio Fwd
TXG-TTOREX GOLD RESOURCES INC14.7247213.723.09065-24.01553-34.1029472.328084739.932880171
JE-TJUST ENERGY GROUP INC17.191576.327.40305-11.73184-9.3453819.644961387.707317073
UNS-TUNI-SELECT INC20.6147524.9930.54688-10.4622-14.5081715.4761102311.93995548
LNR-TLINAMAR CORP21.5399965.9965.55005-17.9840915.031078.2159148297.718128655
ENB-TENBRIDGE INC22.9233646.4852.8879-1.169467-14.9352426.833192321.21405751
PAAS-TPAN AMERICAN SILVER CORP22.965119.0722.6896-9.147214-5.43391722.5680635423.61537167
AD-TALARIS ROYALTY CORP23.3369718.4921.45825-7.918328-17.8490317.45087025#N.A N.A
ABX-TBARRICK GOLD CORP24.0872717.8922.35645-1.050888-16.3308214.2827066917.75115991
SSRM-TSSR MINING INC24.5940411.213.2546-9.017061-6.74438122.9370028539.26621399
ZZZ-TSLEEP COUNTRY CANADA HOLDING24.9429331.8235.4441-5.24121612.1351121.8411646918.34005764
WPK-TWINPAK LTD25.647247.8153.69845-4.303445.43775922.5832163322.92642642
ELD-TELDORADO GOLD CORP26.32651.613.572251.257863-62.54278#N.A N.A19.84400951
ECI-TENERCARE INC27.45319.6920.0939-1.50074814.8110631.46247039#N.A N.A
CG-TCENTERRA GOLD INC27.481887.697.4993-2.65822722.257558.0219946646.292639185
CCL.B-TCCL INDUSTRIES INC - CL B27.8239456.4460.01295-9.3041967.57770923.8953636420.17876296
KDX-TKLONDEX MINES LTD27.838823.654.908-2.14477-41.6#N.A N.A9.228301922
INE-TINNERGEX RENEWABLE ENERGY28.5310613.7514.4165-2.6203971.40954561.6838110326.80311891
SW-TSIERRA WIRELESS INC29.6338224.7332.898-16.0841517.6498544.2823992318.81173639
RSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio Fwd
WSP-TWSP GLOBAL INC81.469259.2350.341353.40432935.4700423.5033431819.00834403
WEED-TCANOPY GROWTH CORP81.1991719.3510.139419.9628111.7068#N.A N.A#N.A N.A
CVE-TCENOVUS ENERGY INC80.3764914.4412.91928.083829-28.0115612.4615965232.81818182
IAG-TINDUSTRIAL ALLIANCE INSURANC80.3763260.9855.590153.42605116.4737212.0752474311.48615558
MFC-TMANULIFE FINANCIAL CORP79.8215427.4724.54283.582217.821614.9173973211.2535846
MEG-TMEG ENERGY CORP78.787836.545.583657.742998-29.1441#N.A N.A#N.A N.A
TSGI-TSTARS GROUP INC/THE78.4526127.2922.747354.00152843.5560316.54371329.546419482
CAR.UN-TCAN APARTMENT PROP REAL ESTA77.7060736.9533.391956.11717621.5969321.88690645#N.A N.A
NVU.UN-TNORTHVIEW APARTMENT REAL EST77.6475425.0121.92365.61655532.6133814.0327057#N.A N.A
SU-TSUNCOR ENERGY INC77.3759845.8241.168652.6893766.83640123.6197862328.53051059
BNS-TBANK OF NOVA SCOTIA76.7054783.5978.4513-0.0717318115.1244112.9093429212.27459618
VET-TVERMILION ENERGY INC76.4137648.1345.472956.81314-10.70039102.901908796.64658635
ATD.B-TALIMENTATION COUCHE-TARD -B76.0948564.2160.93563.0327335.94778122.3347569617.98039993
NVA-TNUVISTA ENERGY LTD75.826098.66.65692.2592223.9193136.4521094832.69961977
TCN-TTRICON CAPITAL GROUP INC75.0030411.5710.813256.4397424.4973622.8480995711.79168646
EMP.A-TEMPIRE CO LTD 'A'74.1620924.8620.357657.29391761.4985942.0582498521.13945578
T-TTELUS CORP73.4981547.5244.6822.10571614.9400718.1774784617.0261555
HSE-THUSKY ENERGY INC73.4756516.9315.459651.3772473.92879296.3727873876.26126126
CTC.A-TCANADIAN TIRE CORP-CLASS A73.07967162.42152.2123.43905118.6369616.1239515314.73731966
TSX-IS&P/TSX COMPOSITE INDEX72.3050116082.0915461.590.42347247.67854219.8594405217.59873118
CNQ-TCANADIAN NATURAL RESOURCES72.0973746.1940.727752.03224810.1726230.1157088928.26805386
DRG.UN-TDREAM GLOBAL REAL ESTATE INV71.9305711.6210.438054.21524631.081722.73883583#N.A N.A
CIGI-TCOLLIERS INTERNATIONAL GROUP71.7097975.3765.8216-0.698283652.4276231.6649446219.36616663
FNV-TFRANCO-NEVADA CORP71.5882310794.19214.00466634.5635873.4522201876.17764487
BTE-TBAYTEX ENERGY CORP71.342614.23.9238515.06849-35.97561#N.A N.A8.606557377
ARE-TAECON GROUP INC71.2515819.4516.40310.516799830.445230.9276559424.43467337
TOU-TTOURMALINE OIL CORP71.101126.8326.9951513.68644-25.2854427.8029646722.52728799
QBR.B-TQUEBECOR INC -CL B71.0251549.7443.099052.17748933.7596318.3399241315.88122605
NWC-TNORTH WEST CO INC/THE71.0075531.9130.965450.440666819.5741921.127091518.18233618
ARX-TARC RESOURCES LTD70.9721717.7717.760558.485961-20.9240119.8774916331.1754386
FTS-TFORTIS INC70.7626948.1344.63292.77619.3026319.4041757418.14172635
IPL-TINTER PIPELINE LTD70.5427227.0426.25452.385463-3.96098619.4163888417.62711864
WFT-TWEST FRASER TIMBER CO LTD70.5006681.6462.190053.31561570.7210813.0118431712.84253579
POU-TPARAMOUNT RESOURCES LTD -A70.4348624.9319.679510.0662347.1265215.40541662#N.A N.A
PPL-TPEMBINA PIPELINE CORP70.4083445.7542.58216.39534913.4476936.3011111722.19796215
TOG-TTORC OIL & GAS LTD70.157147.116.04333.04348-11.13932#N.A N.A#N.A N.A
PXT-TPAREX RESOURCES INC70.124917.9815.62915.4545436.3905318.418691456.828679271
REI.UN-TRIOCAN REAL ESTATE INVST TR70.0953125.4625.08513.2860.204780714.84361965#N.A N.A
VRX-TVALEANT PHARMACEUTICALS INTE70.0696319.4617.382737.23553-0.05136577#N.A N.A4.674371355
IFP-TINTERFOR CORP70.0034822.1418.555654.28638447.3053919.1013557215.46089385

Source: Bloomberg