TSX Stocks Reach New Heights Amid Overbought and Oversold Status

The S&P/TSX Composite index rose 1.6% for the week, with a 16.6% increase for 2023, and a Relative Strength Index (RSI) of 71, placing it in overbought territory. 33 index stocks are overbought by RSI, while 40 stocks showed strong price momentum by hitting new 52-week highs.

The S&P/TSX Composite index experienced a robust performance in 2023, rising by 16.6% year-to-date. This week, the index climbed by an additional 1.6%, driven by strong price momentum and a Relative Strength Index (RSI) of 71. The RSI indicates that the index is in overbought territory, with 33 index stocks showing signs of overvaluation.

Among the index constituents, 40 stocks hit new 52-week highs, demonstrating strong price momentum. This trend is reflective of the broader market's bullish sentiment and the resilience of the Canadian economy. However, the overbought conditions, as indicated by the RSI, suggest that investors should exercise caution and monitor the market closely for potential corrections.

Key Performance Metrics:

- YTD Return: The S&P/TSX Composite index (^GSPTSE) has a YTD return of 15.08% [1].
- 1-Year Return: The index has a 1-year return of 22.99% [1].
- 3-Year Return: The 3-year return stands at 41.84% [1].
- 5-Year Return: The 5-year return is 71.53% [1].

Institutional Investor Activity:

Institutional investors have shown significant interest in Canadian Natural Resources Limited (CNQ). Hsbc Holdings PLC, for instance, has reduced its stake in CNQ by 2.8%, holding shares worth $30.66 million after selling 28,470 shares [2]. Despite this reduction, analysts maintain a consensus rating of "Moderate Buy" with a price target of $62.00, reflecting strong investor sentiment.

Other notable institutional investors include Quantbot Technologies LP, Wellington Management Group LLP, Aviso Financial Inc., Northern Trust Corp, and Burgundy Asset Management Ltd., which have increased their stakes in CNQ by varying percentages [2].

Dividend and Earnings:

Canadian Natural Resources Limited recently declared a quarterly dividend of $0.4269, to be paid on October 3rd, with an annualized yield of 5.5% [2]. The company reported a quarterly earnings per share (EPS) of $0.51, beating the consensus estimate of $0.44 [2].

Conclusion:

The S&P/TSX Composite index's strong performance in 2023 is a testament to the resilience of the Canadian market. However, the overbought conditions indicated by the RSI suggest a need for caution. Investors should closely monitor the market for potential corrections and consider the long-term fundamentals of individual stocks.

References:
[1] https://finance.yahoo.com/quote/GSVR.V/
[2] https://www.marketbeat.com/instant-alerts/filing-hsbc-holdings-plc-has-3066-million-stock-position-in-canadian-natural-resources-limited-cnq-2025-08-23/