TECHNICAL ANALYSIS: TSX Hits All-time High; Momentum is strong; RSI overbought

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The Toronto Stock Exchange is little changed in afternoon trading at around the 15,210 level, off a record high of 15,256 hit late morning as investors took profits following 5-consecutive higher closes. Stocks initially were propelled by stronger than expected Canadian exports and a robust U.S. jobs report, but volume thinned as traders took positions ahead of the Independence Day 3-day weekend in the U.S.

Momentum on the TSX is strong as the MACD (moving average convergence divergence) index generated a buy signal Wednesday. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The index moved from negative to positive territory confirming the buy signal.

The RSI moved higher Thursday along with price action, but the oscillator is printing a reading of 73, which is above the overbought trigger level of 70 and could foreshadow a correction in the TSX.



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This article appears in: Investing , Commodities

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