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Inside the Market The week’s most oversold and overbought stocks on the TSX

The S&P/TSX Composite eased lower by 0.3 per cent for the trading week ending with Thursday’s close and sits 4.5 per cent lower for the year.

In technical terms, Relative Strength Index (RSI) is in the neutral range at 43, although closer to the oversold buy signal of 30 than the overbought RSI sell signal of 70.

There are 16 oversold attractive index members trading below the RSI buy signal of 30 this week.

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Cineplex Inc. is the most oversold company in the benchmark after dropping more than 9 per cent last week. Tamarack Valley Energy Ltd. is the next most oversold stock, followed by Computer Modelling Group Ltd., Crescent Point Energy Corp., Boardwalk REIT, Guyana Goldfields Inc., Nuvista Energy Ltd. and Superior Plus Corp.

I picked Superior Plus as the focus chart this week. The stock has been trading in a relatively narrow range between $10.50 and $13.50 for the past two years, but the company’s high dividend yield – currently 6.9 per cent – should be taken in to account whenever looking at the low price volatility.

RSI buy signals have had a mixed record in uncovering profitable entry points for Superior Plus. The stock was frequently oversold by RSI during the May to July 2017 period before finally rallying 19 per cent from early August 2017 to October 27, 2017.

A November 2017 buy signal was ineffective as the price continued lower until another buy signal in February of this year. After that, the price climbed another 19 per cent to mid-May. More recently, a buy signal near the end of October was also ineffective.

RSI buy signals have not provided enough reliable entry points for Superior Plus in the past two years to trust the current one. This is also a case where fundamental research is even more important than usual – any investor considering buying Superior Plus for the dividend and riding out the current downdraft needs to be absolutely certain that the income payments stay at current levels.

There are five overbought, technically vulnerable S&P/TSX Composite constituents this week according to RSI. Loblaw Companies Ltd. is the most frothy name in the index, followed by Franco-Nevada Corp., Metro Inc., Home Capital Group Inc., Tahoe Resources Inc., and SSR Mining.

RSI Price 200DMA Return 1W % Return YTD % PE Ratio TTM PE Ratio Fwd
CGX-T CINEPLEX INC 21.35668 25.99 31.42475 -9.505571 -27.13601 21.225995 17.83802334
TVE-T TAMARACK VALLEY ENERGY LTD 21.84366 2.32 3.87125 -8.300395 -18.88112 23.84794808 12.60869565
CMG-T COMPUTER MODELLING GROUP LTD 22.85864 6.7 9.11655 -1.470588 -27.87834 27.16763163 23.75886525
CPG-T CRESCENT POINT ENERGY CORP 23.26431 4.63 8.7586 -9.922179 -50.01614 42.14109635 10.84309133
BEI-UN-T BOARDWALK REAL ESTATE INVEST 23.74821 42.9 46.7166 -4.069767 1.34952 10.40071897 #N/A N/A
GUY-T GUYANA GOLDFIELDS INC 23.81059 1.38 4.10635 -0.7194245 -72.83465 7.990145108 3.236455351
NVA-T NUVISTA ENERGY LTD 24.89677 4.42 7.7651 -0.896861 -44.88778 7.482039848 8.065693431
SPB-T SUPERIOR PLUS CORP 25.84871 10.52 12.60355 -0.8482563 -7.0336 #N/A N/A 13.87862797
ZZZ-T SLEEP COUNTRY CANADA HOLDING 26.76205 21.57 31.42705 2.133741 -33.79761 13.23312865 11.71645845
ECA-T ENCANA CORP 26.81069 9.89 15.45665 -3.228963 -40.80322 11.8481148 7.49865475
HSE-T HUSKY ENERGY INC 26.97683 16.2 19.3814 -9.243697 -7.439771 8.585137941 12.15303826
ATA-T ATS AUTOMATION TOOLING SYS 27.36113 17.07 19.43915 -1.100811 9.77492 28.37966522 17.12136409
TCW-T TRICAN WELL SERVICE LTD 28.07488 1.28 2.8163 0 -68.62745 #N/A N/A #N/A N/A
SCL-T SHAWCOR LTD 28.34321 20.63 25.36345 -2.688679 -22.90432 26.31320387 38.27458256
DOO-T BRP INC/CA- SUB VOTING 29.13619 44.06 56.36125 -9.416119 -4.816992 15.92618628 13.68322981
DOL-T DOLLARAMA INC 29.40026 33.88 47.17092 -1.568855 -35.06352 21.11789829 18.52378349
RSI Price 200DMA Return 1W % Return YTD % PE Ratio TTM PE Ratio Fwd
L-T LOBLAW COMPANIES LTD 76.13496 60.04 53.58439 1.98743 10.9745 19.06287762 13.46188341
FNV-T FRANCO-NEVADA CORP 74.16415 93.41 89.30095 7.34314 -6.029409 59.07254074 61.23324827
MRU-T METRO INC 71.33949 44.83 41.84855 3.509582 13.38067 18.49161621 15.58220368
HCG-T HOME CAPITAL GROUP INC 70.40302 17.22 14.78905 -0.9775733 -0.5199307 10.88978069 8.890036138
THO-T TAHOE RESOURCES INC 70.3934 4.57 5.384125 2.008929 -24.21227 #N/A N/A #N/A N/A
SSRM-T SSR MINING INC 70.16577 14.95 12.5933 4.253835 35.04968 49.5269455 94.87256371

Source: Bloomberg/Scott Barlow

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