Introduction

In an exciting week for the S&P/TSX Composite, the index saw a notable increase of 1.2% for the shortened trading period ending Friday. So far, this rally has resulted in a cumulative rise of 1.4% for 2025. Currently, the benchmark's Relative Strength Index (RSI) sits at a neutral 52, indicating a balance between the oversold and overbought conditions investors keep a close eye on. The RSI levels range from 30, signaling a potential buying opportunity, to 70, which often indicates an overbought situation ripe for a potential market correction.

Oversold Stocks

Interestingly, there are no stocks categorized as oversold based on RSI this week, with Power Corp of Canada being the closest at a reading of 30.1—just shy of the oversold threshold that might attract bargain hunters.

Overbought Stocks

On the flip side, investors should be cautious of several stocks that are currently overbought, as indicated by their RSIs exceeding 70. Leading this group is Aritzia Inc., which stands as the most overbought stock on the index. Others in the overbought category include ECN Capital Corp., CI Financial Corp., TransAlta Corp., Ballard Power Systems Inc., Methanex Corp., and Enbridge Inc. These stocks may pose risks as they might experience a short-term pullback, and investors should consider their positions carefully.

Stocks with Price Momentum

In another notable development, five stocks are exhibiting strong price momentum, each reaching new 52-week highs. These stocks, listed by market capitalization, include: 1. Enbridge Inc. – The largest player among these achieving new heights. 2. Aritzia Inc. – Also significant, continuing to attract investor interest. 3. Orla Mining Ltd. – Gaining traction in the mining sector. 4. Enerflex Ltd. – Showing strength in the energy services arena. 5. Transcontinental Inc. – Making its mark in the printing and packaging industry.

Conclusion

As the market evolves, investors should maintain vigilance regarding these key stocks. Keeping an eye on RSI levels and price momentum can help in making informed decisions. Understanding the delicate balance between oversold and overbought stocks can be pivotal in navigating the volatile waters of the stock market. Stay tuned for more updates, and remember: in investing, knowledge is as valuable as capital!