Canadian stocks edged higher on Tuesday

index Update:

After opening lower than yesterday's close, today the benchmark S&P/TSX Composite Index traded lower early in the session but gained ground towards the end of the day before settling at 34,290.73, up by 151.85 points (or 0.44%).

Macro Update:

Investors are focusing on Trump's visit to China to attend a summit on May 14-15. Trump stated that he will have a "long talk" with Chinese President Xi Jinping about the Iran war but stressed that the U.S. does not need China's help and it will win the war "peacefully or otherwise".

Since China is the largest beneficiary of Iran's oil exports, traders still anticipate the possibility of Chinese mediation in reopening the Strait of Hormuz.

Aside from the Middle East crisis, traders are also awaiting some positive signal from the U.S.-Canada negotiations ahead of the upcoming renewal of Canada-United States-Mexico Agreement for Free Trade.

On the data front, it was an uneventful day for Canada with no specific releases.

Top Movers:

Among the individual stocks, Paramount Resources Ltd (5.64%), CDN Natural Res (4.06%), Cenovus Energy Inc (3.16%), and Weston George (2.82%) were the prominent gainers.

Our Stance:

Immediate support is located near 34,100; a break below this level could trigger consolidation toward 33,800. On the upside, a decisive move above 34,400 would strengthen bullish sentiment and could pave the way for further gains toward 34,600.

Commodity Update:  

The U.S. dollar stayed near a one-week high on Wednesday after stronger-than-expected U.S. Inflation data pushed Treasury yields higher and weakened overall risk sentiment. Gold climbed 0.27% to USD 4,699.40, silver advanced 1.75% to USD 87.08, and copper gained 0.67% to USD 14,117.70. Brent Crude slipped 0.76% to USD 106.95 after three straight sessions of gains, while investors tracked Middle East tensions and awaited talks between Donald Trump and Xi Jinping.

Technical Update:

The S&P/TSX Composite Index advanced 151.85 points, or 0.44%, on Tuesday to close at 34,290.73. Technically, the index remains above its 21-day Simple Moving Average (SMA), which continues to act as reliable dynamic support and reinforces the broader positive trend. Momentum remains constructive, with the 14-day Relative Strength Index (RSI) at 60.31, indicating steady bullish strength with room for additional upside. Immediate support is located near 34,100; a break below this level could trigger consolidation toward 33,800. On the upside, a decisive move above 34,400 would strengthen bullish sentiment and could pave the way for further gains toward 34,600.