The TSX ended the day's session on a slightly positive note

Image Souce: Krish Capital Pty Ltd

Index Update:  Canadian stocks tumbled Tuesday morning, hurt by hot inflation data and escalating geopolitical tensions, but recovered gradually to eventually end the day's session on a slightly positive note. The benchmark S&P/TSX Composite Index, which dropped nearly 200 points to 24,787.79 in early trades, settled at 25,010.77, gaining 33.83 points or 0.14%.

Macro Update: Data from Statistics Canada showed the annual inflation rate in Canada rose to 2% in October from an over-three-year low of 1.6% in the previous month. The consumer price index increased 0.4% in October over the previous month.

The annual core inflation rate in Canada increased to 1.7% in October, up from 1.6% a month earlier. On a monthly basis, core consumer prices rose by 0.4% in October, after being flat in the prior month.

Top Movers: Dye & Durham (DND.TO) closed with a big gain of 13.2%. Celestica Inc (CLS.TO), Torex Gold Resources (TXG.TO), Agnico Eagle Mines (AEM.TO), Quebecor (QBR.A.TO), Wheaton Precious Metals (WPM.TO), Cameco Corporation (CCO.TO) and Franco-Nevada Corporation (FNV.TO) gained 2 to 3%.

Our Stance: Currently, the index is testing an important support level around 24,500. Holding above this level is crucial to maintaining upward momentum. A break below 24,400 could indicate a retracement risk, with key support levels identified on the weekly chart around 24,000 to 23,800. To sustain the bullish trend, the index must remain above these support levels, ensuring continued growth potential in the near term.

Commodity Update: On Wednesday, the U.S. dollar lost some of its recent gains as investors were spooked by Ukraine's use of U.S. missiles in strikes on Russia, prompting fears of a potential nuclear escalation, although these concerns eased later. Attention also turned to former President Trump's selection of a Treasury Secretary as part of his team. In commodities, gold rose 0.48% to $2,643.75, silver gained 0.08% to $31.28, and copper increased 0.26% to $9,145 per ton. Brent crude edged up 0.1% to $73.40 a barrel, supported by tensions in Ukraine and growing Chinese crude imports, despite rising U.S. oil stocks.

Technical Update: On Tuesday, the S&P/TSX Composite Index saw a modest gain, increasing by 33.83 points to close at 25,010.77, marking a rise of 0.14%. This positive performance was underpinned by strong trading volumes, reflecting sustained investor enthusiasm and confidence in the market. A notable contributor to the day's gains was the utilities sector, which rose by 0.53%, suggesting growing optimism in this segment of the market. From a technical analysis perspective, the index remains in a bullish trend, trading above its 21-period Simple Moving Average (SMA). This indicates favorable market conditions. The Relative Strength Index (RSI) stands at 65.41, suggesting market strength without yet reaching overbought territory, leaving room for potential further gains. Currently, the index is testing an important support level around 24,500. Holding above this level is crucial to maintaining upward momentum. A break below 24,400 could indicate a retracement risk, with key support levels identified on the weekly chart around 24,000 to 23,800. To sustain the bullish trend, the index must remain above these support levels, ensuring continued growth potential in the near term.