The Canadian market ended on a strong note on Friday

Image Source : Krish Capital Pty Ltd

Index Update: The benchmark S&P/TSX Composite Index ended the session with a gain of 350.17 points or 1.45% at 24,553.40. For the week, the index shed about 0.8%.

Macro Update: On the economic front, data from Statistics Canada said manufacturing sales in Canada rose 1.7% month-over-month in January 2025, following an upwardly revised 0.5% increase in the prior month. This marked the fourth consecutive month of increases in manufacturing sales.

Wholesale sales in Canada rose by 1.2% from the previous month in January of 2025, revised lower from the preliminary estimate of 1.8% but picking up from the 0.3% increase in the earlier period.

Top Movers: BlackBerry, Celestica Inc., Lightspeed Commerce and Shopify gained 4.3 to 5.6%. Bird Construction rallied 5.3%. Cargojet, Ats Corp, Aecon Group, Finning International and WSP Global gained 3 to 4.2%

Our Stance: Moving Average (SMA), reinforcing the prevailing downtrend and ongoing selling pressure. Momentum indicators present a cautious outlook. The key support level to monitor is 24,300, aligning with a significant horizontal trendline. Maintaining this level could provide a base for stabilization and recovery, while a breakdown may accelerate declines, with further downside targets at 24,000 and 23,700. 

Commodity Update: The U.S. dollar remained near a five-month low on Monday, weighed down by President Trump's unpredictable trade policies and weak economic data. March data revealed U.S. consumer sentiment dropped to a near 2-1/2-year low, with inflation expectations rising amid concerns over Trump’s tariffs, sparking a global trade war. In commodities, gold fell 0.19% to $2,995.30, silver dropped 0.36% to $34.31, and copper edged up 0.01% to $9,796.70. Brent crude rose 1.06% to $71.33. U.S. stock futures declined, while Asian markets gained. The week’s key focus is central bank meetings, with the U.S. Federal Reserve expected to hold rates steady.

Technical Update: The S&P/TSX Composite Index delivered a strong performance on Friday, rising 350.17 points (+1.45%) to close at 24,553.17, driven by high trading volumes that signal continued investor optimism. Leading the rally was the technology sector, which surged 2.83%, reflecting growing confidence in tech stocks. Despite this rebound, the index remains below its 21-period Simple Moving Average (SMA), reinforcing the prevailing downtrend and ongoing selling pressure. Momentum indicators present a cautious outlook, with the Relative Strength Index (RSI) at 43.44, nearing oversold territory. While this suggests the potential for a short-term rebound, downside risks remain. The key support level to monitor is 24,300, aligning with a significant horizontal trendline. Maintaining this level could provide a base for stabilization and recovery, while a breakdown may accelerate declines, with further downside targets at 24,000 and 23,700.