Canadian Stocks Close Slightly Higher

Image Source : Krish Capital Pty Ltd

Index Update:  Canadian stocks moved to the downside early in the trading day on Friday but rebounded over the course of the session. The benchmark S&P/TSX Composite Index lost 0.03% and closed at 26,497.57.

Macro Update:  Renewed trade concerns weighed on the market early in the session after U.S. President Donald Trump threatened to impose 50 percent tariffs on imports from the European Union beginning June 1st. Statistics Canada released a report showing retail sales climbed by 0.8 percent in March, led by increases at motor vehicle and parts dealers.

Top Movers:  The biggest gainers of the session on the S&P/TSX Composite were MDA Ltd (TSX:MDA), which rose 5.09% or 1.56 points to trade at 32.22 at the close. Bombardier Inc (TSX:BBDb) added 3.95% or 4.21 points to end at 110.81 and Brookfield Business Partners LP (TSX:BBU_u) up 3.40% or 1.16 points to 35.25 in late trade.

Our Stance: Currently, the index is currently testing a critical support zone near 26,200. Holding above this level is crucial for maintaining upward momentum. A decisive break below 26,200 could signal the potential for a retracement, with the next key support levels seen between 25,900 and 25,600 on the daily chart. Sustaining these levels will be essential for the bullish trend to remain intact in the near term.

Commodity Update:  The U.S. dollar edged up on Monday as investors sought safety amid Middle East tensions and waited for Iran’s response to U.S. strikes on its nuclear facilities. Gold slipped 0.16% to $3,380.95, while silver rose 0.09% to $36.05. Copper dipped 0.21% to $9,634.40. Brent crude jumped 1.92% to $78.93, its highest since January, as U.S. support for Israeli attacks on Iran fueled supply concerns.

Technical Update:  On Friday, the S&P/TSX Composite Index posted a modest decline, slipping 8.43 points to close at 26,497.57, a loss of 0.03%. The basic materials sector weighed on performance, falling 0.40% during the session. From a technical standpoint, the index remains well-positioned, continuing to trade above its 21-period Simple Moving Average (SMA) a key level that supports the broader bullish trend. The Relative Strength Index (RSI) sits at 64.62, reflecting solid market strength while staying below overbought territory, leaving room for further upside. The index is currently testing a critical support zone near 26,200. Holding above this level is crucial for maintaining upward momentum. A decisive break below 26,200 could signal the potential for a retracement, with the next key support levels seen between 25,900 and 25,600 on the daily chart. Sustaining these levels will be essential for the bullish trend to remain intact in the near term.