Canadian stocks climbed to a new record higher on Thursday

Image Source : Krish Capital Pty Ltd

Index Update: After opening a little lower than yesterday's close, the benchmark S&P/TSX Composite Index fell to the day’s low, within minutes but quickly bounced back. The carried the upward momentum throughout the session to settle at 28,055.43, up by 176.67 points (or 0.63%). Notably, this is a fresh record for the index.

Macro Update: According to the data released by Statistics Canada today, Canada's industrial producer prices rose 0.7% month-over-month in July, while prices jumped 2.6 percent year-over-year. Powell's discourse is keenly anticipated as it could shed light on the Fed's monetary policy and help assess the likelihood of a rate cut at the central bank's upcoming meeting in September. CME group's FedWatch Tool data currently reveals that traders now see a 71.5% chance for a 25 basis point rate cut, with the possibility of rates remaining unchanged holding at 28.5%.

Top Movers:  Among the individual stocks, Energy Fuels Inc (10.40%), Orla Mining Ltd (7.22%), Ngex Minerals Ltd (5.68%), Alamos Gold Inc (5.09%), Advantage Oil & Gas Ltd (3.91%), and Rogers Communications Inc (0.98%) were the prominent gainers.

Our Stance:  Currently, the index is testing key support near 27,800. Holding this level will be crucial to sustain the ongoing bullish trend, while a breakdown could trigger a pullback toward the next support zones at 27,500 and 27,300. On the upside, maintaining strength above these levels will be essential for preserving upward momentum in the sessions ahead.

Commodity Update:  The U.S. dollar stayed firm on Friday, on track for a strong weekly close ahead of Fed Chair Jerome Powell’s Jackson Hole speech that may shape rate outlook. Gold slipped 0.15% to $3,376.60, silver edged up 0.03% to $38.09, and copper eased 0.02% to $9,731.55. Brent crude fell 0.20% to $67.51 but was still set for weekly gains as stalled Russia-Ukraine peace talks heightened supply concerns.

Technical Update:

On Thursday, the S&P/TSX Composite Index advanced 176.67 points, or 0.63%, to close at 28,055.43. The gains were driven by strong trading volumes, with the basic materials sector leading performance, up 2.18%. From a technical standpoint, the index continues to trade well above its 21-period Simple Moving Average (SMA), reinforcing a positive short-term outlook. The Relative Strength Index (RSI) stands at 66.18, indicating solid momentum. Currently, the index is testing key support near 27,800. Holding this level will be crucial to sustain the ongoing bullish trend, while a breakdown could trigger a pullback toward the next support zones at 27,500 and 27,300. On the upside, maintaining strength above these levels will be essential for preserving upward momentum in the sessions ahead.