In the latest trading week, the S&P/TSX Composite Index surged by an impressive 2.3%, marking a remarkable 24.7% increase as 2024 approaches its final month. However, this rapid climb has pushed the index’s Relative Strength Index (RSI) to a staggering 75, indicating it is significantly overbought, with a sell signal threshold at 70.

On the other end of the spectrum, several stocks have emerged as oversold opportunities. Leading the pack is BCE Inc., recognized as the most oversold stock on the exchange. Following BCE are InterRent REIT, Boralex Inc., H&R REIT, Innergex Renewable Energy Inc., and Boardwalk REIT. Investors might find these stocks appealing as they trade below the buy signal threshold of 30, making them potentially attractive for savvy traders looking for bargains.

In stark contrast, a long list of stocks currently appears overbought, suggesting a correction might be on the horizon. Keyera Corp. tops this list, closely followed by major financial institutions including Canadian Imperial Bank of Commerce (CIBC), Canadian Western Bank, Definity Financial Corp., and Bank of Nova Scotia, all of which might be due for a reevaluation.

Further analysis reveals that 14 stocks in the TSX index have broken through to new highs, showcasing strong momentum. Among the top five performing stocks, Bank of Nova Scotia, CIBC, Suncor Energy Inc., Waste Connections Inc., and Imperial Oil Ltd. are leading the charge, reflecting investor confidence and robust market demand.

Conversely, there are also stocks sliding to new lows this week—most notably Northland Power Inc. and InterRent REIT—raising concerns among investors about the viability and market position of these companies.

As the market tentatively heads into the final month of the year, investors should carefully consider both the oversold and overbought stocks in their strategy. Balancing risk against potential reward could prove crucial in navigating these unpredictable but intriguing market conditions. Don't miss out on these investment cues!