BCE Inc stands alone as TSX's only oversold stock amid market highs
- The S&P/TSX Composite Index rose 0.9 percent during the trading week.
- The index's RSI is currently at 77, indicating overbought conditions.
- Investors are urged to consider the implications of temporary corrections in the market.
In the Canadian stock market, the S&P/TSX Composite Index experienced a notable rise of 0.9 percent for the trading week ending with Friday’s close, reflecting a significant increase of 25.8 percent for the year 2024 thus far. This upward momentum has led to the index reaching a Relative Strength Index (RSI) of 77, which places it well into overbought territory—an indication that the market may be due for a correction, especially since an RSI reading above 70 is considered a sell signal. The market conditions reveal the presence of 22 stocks within the index that are residing above the 70 RSI threshold, which implies an increased risk of experiencing a temporary downturn in the near future. Among these overbought stocks, CI Financial Corp., Bank of Nova Scotia, Laurentian Bank of Canada, Methanex Corp., and CAE Inc are highlighted as the top five candidates that might be facing corrections soon. Simultaneously, the analysis points out that there is only one oversold stock within the benchmark constituents, which is BCE Inc. The stock remains below the buy signal threshold of 30 on the RSI scale, making it an attractive option for investors looking for potential opportunities amidst an overall overbought market. Despite being oversold, BCE Inc's position serves as a stark contrast to the other prominent stocks on the TSX that are showing signs of being