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The TSX Index closed on a bright note on Wednesday

By: Team Kalkine | Jan 16, 2025 | Read Time : 10 Mins
The TSX Index closed on a bright note on Wednesday

Image Source : Krish Capital Pty Ltd

Index Update: The benchmark S&P/TSX Composite Index ended with a gain of 200.72 points or 0.82% at 24,789.30, about 100 points off the day's high of 24,879.24.

Macro Update: U.S. consumer prices data showed headline inflation in the world's largest economy rose marginally above forecasts in December, while the core number came in softer than expected on an annual basis.

Canadian factory sales grew by 0.8% in November on higher sales of aerospace products and parts, as well as petroleum and coal products.

Top Movers: Celestica Inc (CLS.TO), Converge Technoloy Services (CTS.TO), BlackBerry (BB.TO), Tecsys (TCS.TO), Sangoma Technologies (STC.TO), Shopify Inc (SHOP.TO), Enghouse Systems (ENGH.TO), Open Text Corporation (OTEX.TO) and Descartes Systems Group (DSG.TO) gained 2 to 4%. Bitfarms (BITF.TO) climbed nearly 5%.

Our Stance: The current rally appears more corrective than trend-reversing at this stage. The Relative Strength Index (RSI), sitting at 46.40, reflects a neutral positioning, indicating the market has room for additional upside before nearing overbought territory. This opens the possibility for further advances, provided key levels are maintained. Crucially, the index is testing a support level around 24,400, which has so far held firm.

Commodity Update: The U.S. dollar edged lower on Thursday, retreating from recent highs as U.S. inflation data eased, leading to a drop in bond yields. Meanwhile, the Japanese yen climbed to a one-month high amid growing expectations of a rate hike by the Bank of Japan next week. In commodities, gold rose by 0.30% to $2,726.80, while silver gained 0.33% to $31.63, and copper also increased by 0.33%, reaching $9,202.50. Brent crude advanced 0.4% to $82.33 per barrel, driven by a larger-than-expected decline in U.S. crude oil stockpiles and concerns over Russian energy sanctions.

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Technical Update: On Wednesday, the S&P/TSX Composite Index climbed by 200.72 points (+0.82%) to close at 24,789.30, signaling renewed investor optimism. This gain was largely driven by the technology sector, which posted a robust 2.00% increase, highlighting strong sector-specific momentum and market confidence. From a technical perspective, however, the index remains below its 21-period Simple Moving Average (SMA), suggesting the broader trend is still bearish despite the recent uptick. This makes the current rally appear more corrective than trend-reversing at this stage. The Relative Strength Index (RSI), sitting at 46.40, reflects a neutral positioning, indicating the market has room for additional upside before nearing overbought territory. This opens the possibility for further advances, provided key levels are maintained. Crucially, the index is testing a support level around 24,400, which has so far held firm. Sustaining above this threshold is vital to prevent a deeper pullback. If the index were to breach this level, it could challenge lower support zones in the 24,200–24,400 range.


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