Canadian stocks showed a strong move

Image Source : Krish Capital Pty Ltd

Index Update:  After opening higher than yesterday's record close, the benchmark S&P/TSX Composite Index today moved upwards to reach an intraday high of 27,039.30 less than an hour past noon. Continuing the momentum, it closed at a new high of 27,034.26, up by 164.60 (or 0.61%).

Macro Update:  Data provided by Statistics Canada revealed that Canada's trade deficits narrowed in May. Imports declined by 1.6%, while exports to non-US countries increased by 5.7%. Exports to the US fell for the fourth straight month, recording a drop of 0.9%, due to the trade war. US Federal Reserve's Chair Jerome Powell has indicated a "wait-and-watch" approach with interest rate cuts. Investors feel that today's US jobs data could take the pressure off of Fed from moving their calendar up, before September.

Top Movers:  Canadian tech leaders Shopify and Constellation Software jumped 2.1% and 1.1%, respectively, while financial stalwarts Brookfield Asset Management and Bank of Montreal added 2.7% and 1.1%. Those advances more than offset declines in energy and base-metal miners as global metals prices softened.

Our Stance:  The index is currently testing a key support level near 26,700. Holding above this threshold is essential to preserve the current bullish trend, while a breakdown below it could lead to a pullback toward the next support zones near 26,400 and 26,200. Sustained movement above these levels will be crucial for maintaining upward momentum in the sessions ahead.

Commodity Update:  The dollar held firm on Friday after President Trump secured his tax cut bill, and global pressure intensified for trade deals with the U.S. A strong jobs report delayed expectations for a Fed rate cut, lifting the greenback from multi-year lows. Gold edged down 0.09% to $3,340, silver slipped 0.37% to 36.94$, copper dropped 0.37%, while Brent crude inched up 0.01% to $68.81 amid anticipation over Trump’s upcoming tariff decisions.

Technical Update:  On Thursday, the S&P/TSX Composite Index advanced by 164.60 points to close at 27,034.26, marking a gain of 0.61%. The upward move reflects continued investor confidence, supported by strong trading activity, particularly in the healthcare sector, which outperformed with a 1.42% surge. From a technical perspective, the index remains comfortably above its 21-period Simple Moving Average (SMA), reinforcing a bullish short-term outlook. The Relative Strength Index (RSI) stands at 72.57, indicating strong momentum but also highlighting overbought conditions. The index is currently testing a key support level near 26,700. Holding above this threshold is essential to preserve the current bullish trend, while a breakdown below it could lead to a pullback toward the next support zones near 26,400 and 26,200. Sustained movement above these levels will be crucial for maintaining upward momentum in the sessions ahead.