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The S&P/TSX Composite was higher by a scant 0.1 per cent for the week ending with Thursday's close and stands 7.6 per cent higher for the year.

The benchmark's Relative Strength Index (RSI) reading of 50.5 puts in neutral technical territory, almost exactly halfway between the buy signal of 30 and the sell signal of 70.

There are nine oversold, technically attractive index member stocks according to RSI this week. Advantage Oil & Gas Ltd is the most oversold company this week, followed by Paramount Resources Ltd., Bonavista Energy Corp., Osisko Gold Royalties Ltd., Torex Gold Resources Inc., Imperial Oil Ltd., Crew Energy Inc., Birchcliff Energy Ltd. and Trican Well Services Ltd.

All of the oversold stocks are energy and precious metals-related, where technical indicators like RSI are less effective because prices are more affected by the oil and gold prices than technical factors. For the focus chart this week, I picked the most overbought, technically vulnerable stock by RSI in the benchmark, Labrador Iron Ore.

Labrador Iron Ore 's current RSI level is 80.7, well above the sell signal of 70. The past two years of history suggests that investors should take the sell signal seriously and hold off on purchasing the stock until the technical froth burns off.

Overbought levels were apparent for the company in March, April and July of 2016. In the first case, the price correction was small but the April and July signals were quickly followed by significant sell-offs. Similarly, an RSI sell signal in December 2016 was followed by a period of price weakness that saw Labrador Iron Ore fall 19 per cent by April 2017. More recently, a sell signal in early September 2017 predicted a small correction.

The remainder of S&P/TSX Composite companies on the overbought list has few themes in terms of sector orientation. Behind Labrador Iron Ore, Alimentation Couche-Tard Inc., Brookfield Business Partners LP, Smartcentres REIT and Methanex Corp. are the most technically extended stocks in the index.

As always, fundamental research could provide a completely conflicting outlook than technical analysis and investors should always complete fundamental research before making any market transactions.

RSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio Fwd
AAV-TADVANTAGE OIL & GAS LTD16.970975.097.9102750.3929299-43.969320.2191941422.13043478
POU-TPARAMOUNT RESOURCES LTD -A22.2263617.1320.14805-5.9890110.976119810.58543002#N/A N/A
BNP-TBONAVISTA ENERGY CORP24.726651.812.8572-1.612903-61.5786933.4423432319.05263158
OR-TOSISKO GOLD ROYALTIES LTD25.3705714.115.56925-2.231527.989446113.717017155.29411765
TXG-TTOREX GOLD RESOURCES INC27.913861221.08025-4.792851-43.6267462.6953037116.26333571
IMO-TIMPERIAL OIL LTD28.6061538.3538.9721-4.532863-17.5174841.7352715618.58943286
CR-TCREW ENERGY INC28.68463.334.20205-6.197183-55.65912#N/A N/A144.7826087
BIR-TBIRCHCLIFF ENERGY LTD29.3498346.0531-1.102941-56.4295114.978412369.280742459
TCW-TTRICAN WELL SERVICE LTD29.353153.734.0567-12.17184-2015.3415868811.91693291
RSIPrice200DMAReturn 1W %Return YTD %PE Ratio TTMPE Ratio Fwd
LIF-TLABRADOR IRON ORE ROYALTY CO80.7288824.9218.329486.29550348.9996510.1453116713.26943557
ATD.B-TALIMENTATION COUCHE-TARD -B78.8355367.5361.466950.903750510.685221.3563675418.12813855
BBU.UN-TBROOKFIELD BUSINESS PT.UNNIT77.6698543.3736.31668.58218335.33025#N/A N/A#N/A N/A
SRU.UN-TSMARTCENTRES REAL ESTATE INV75.1612330.9831.05485.8079940.852994618.74315557#N/A N/A
MX-TMETHANEX CORP74.261173.5760.980557.78647427.282919.0810417316.02446796
D.UN-TDREAM OFFICE REAL ESTATE INV73.7871722.5520.358351.25955922.0403637.43266558#N/A N/A
MFI-TMAPLE LEAF FOODS INC73.2747836.2233.490751.12485929.5563722.0128182522.56697819
CAR.UN-TCAN APARTMENT PROP REAL ESTA72.2596737.6834.02142.27272724.7526822.31931326#N/A N/A
DRG.UN-TDREAM GLOBAL REAL ESTATE INV72.10612.2510.69661.83486238.5275923.97166451#N/A N/A
ARE-TAECON GROUP INC71.0558619.8816.80150.606366933.5302731.6114010326.02094241
BTO-TB2GOLD CORP70.950993.73.46519.28143714.42006515.708131916.41118421
UNS-TUNI-SELECT INC70.016328.0329.750832.786945-4.108217.1785313214.64614618

Source: Scott Barlow/Bloomberg