Canadian stocks posted sharp gains on Monday

Index Update:  Canadian stocks posted sharp gains on Monday as the crisis in Venezuela prompted investors towards precious metals, which lifted mining stocks, giving the index upward momentum. After opening above the previous week's close, today the benchmark S&P/TSX Composite Index traded firmly positive throughout the session before settling at 32,219.95, up by 336.58 points (or 1.06%).

Macro Update:  On January 3, U.S. forces carried out a rapid operation known as “Absolute Resolve,” deploying approximately 150 aircraft to enter Venezuela and detain President Nicolás Maduro and his wife. The operation, which lasted about 30 minutes, resulted in the collapse of Maduro’s regime and their transfer out of the country.  Maduro is expected to stand trial in a U.S. court. Following the operation, U.S. President Donald Trump stated that the United States would temporarily oversee Venezuela until authority is transferred through judicial processes, warning interim leaders to cooperate to prevent further military action.

Top Movers:  Among the individual stocks, Endeavour Silver Corp (8.62%), Perpetua Resources Corp (8.05%), Capstone Mining Corp (7.89%), Ngex Minerals Ltd (6.91%), Bitfarms Ltd (10.64%), Shopify Inc (5.98%), and Energy Fuels Inc (2.48%) were the prominent gainers.

Our Stance:  Price action is currently consolidating near an important support zone around 32,200. Holding above this level will be critical to maintaining positive sentiment and preserving the broader upward trend. Conversely, a decisive break below this zone could indicate weakening momentum and open the door for a corrective move toward the 32,000 and 31,800 levels.

Commodity Update:   The U.S. dollar held firm near a two-week high in early Asian trade on Tuesday as market anxiety over U.S. military action in Venezuela eased and dovish Federal Reserve remarks supported risk appetite on Wall Street. Gold rose 0.49% to USD 4,474.20, silver surged 2.31% to USD 78.51, and copper advanced 1.39% to USD 13,225.00. Meanwhile, Brent crude slipped 0.20% to USD 61.61 on expectations of higher Venezuelan output and ample global supply amid weak demand.

Technical Update:

On Monday, the S&P/TSX Composite Index surged 336.58 points, or 1.06%, to close at 32,219.95, with healthy trading volumes underscoring strong investor confidence and reinforcing the prevailing bullish momentum. From a technical standpoint, the index continues to trade comfortably above its 21-period Simple Moving Average (SMA), which is acting as a key dynamic support and validating the strength of the short-term uptrend. Momentum indicators remain constructive, with the 14-period Relative Strength Index (RSI) positioned at 66.78, reflecting sustained buying interest without entering overbought territory. Price action is currently consolidating near an important support zone around 32,200. Holding above this level will be critical to maintaining positive sentiment and preserving the broader upward trend. Conversely, a decisive break below this zone could indicate weakening momentum and open the door for a corrective move toward the 32,000 and 31,800 levels.