As the S&P/TSX Composite Index closed last Friday with a notable increase of 0.9% for the week, it continues its impressive ascent, now boasting an astonishing 25.8% surge year-to-date in 2024.

However, with the index’s Relative Strength Index (RSI) climbing to a heated 77, it is firmly positioned in overbought territory, well exceeding the cautionary threshold of 70. Investors should take heed!

In an intriguing twist, there's only one stock dropping below the critical buy threshold of 30 this week, making it an enticing opportunity: BCE Inc. Still reeling in the oversold zone, BCE could represent a savvy buy for those looking to capitalize on potential recovery.

On the flip side, a staggering 22 stocks on the index have RSIs surpassing the 70 mark, indicating a higher likelihood of a price correction. Among these, the five most overbought stocks that could be at risk of a pullback are:

Most Overbought Stocks

CI Financial Corp.

Bank of Nova Scotia

Laurentian Bank of Canada

Methanex Corp.

CAE Inc.

Moreover, the market is buzzing with 17 stocks that have recently made waves by reaching new 52-week highs, suggesting robust upward momentum.

Notable Stocks at 52-Week Highs

Royal Bank of Canada

Shopify Inc.

Constellation Software Inc.

Bank of Nova Scotia (also noted for being overbought)

Fairfax Financial Holdings Ltd.

Interestingly, in stark contrast, there have been no benchmark stocks posting new 52-week lows—another indicator of the current market’s bullish sentiment.

As investors navigate these waters, keeping a vigilant eye on both overbought and oversold conditions could reveal opportunities to enhance investment strategies. Will you seize the moment with BCE Inc., or risk holding onto those overbought stocks? The choices are yours to make!