TSX Ends Modestly Higher

Image Source : Krish Capital Pty Ltd

Index Update: The benchmark S&P/TSX Composite Index closed up 52.72 points or 0.21% at 25,203.98, recovering well from an early low of 24,946.06.

Macro Update: On the economic front, data from Statistics Canada said manufacturing sales in Canada likely rose 2% month-over-month in January, following a 0.3% rise in December, according to preliminary estimates.

Top Movers: Innergex Renewable Energy shares skyrocketed nearly 55% after the company announced that it has signed a definitive agreement that will see investment group CDPQ acquire all of its issued and outstanding common shares, other than those held by CDPQ and certain members of senior management, for $13.75 per share in cash.

George Weston, South Bow, Canadian Tire Corporation, TFI International, Colliers International, Manulife Financial, FirstService, CCL Industries, Stella-Jones, Empire Company, Brookfield Renewable and TerraVest Industires gained 2 to 3%.

Our Stance: Despite this uptick, the index’s technical outlook remains bearish, as it continues to trade below its 21-period Simple Moving Average (SMA), maintaining negative momentum. Currently, the index is testing a key support level around 25,000. Holding above this threshold is crucial for maintaining the bullish trend, while a drop below could prompt a correction, with the next support levels at 24,800 and 24,600.

Commodity Update: The U.S. dollar weakened to an 11-week low against major currencies on Wednesday, pressured by declining short-term Treasury yields following weak economic data. The yen rose to its highest level since October as investor sentiment remained fragile amid fears of new tariffs from the Trump administration. The Canadian dollar hovered near a two-week low with additional tariffs set for next week. In commodity markets, gold surged 0.47% to $2,932.50, silver gained 0.97% to $32.13, and copper rose 0.70% to $9,472.50. Brent crude oil increased 0.40% to $73.29 after a report showed a drop in U.S. crude stockpiles.

Technical Update: On Tuesday, the S&P/TSX Composite Index climbed 52.72 points, closing at 25,203.98, marking a 0.21% gain. This increase reflects sustained investor confidence, particularly in the healthcare sector, which rose by 1.09%. Despite this uptick, the index’s technical outlook remains bearish, as it continues to trade below its 21-period Simple Moving Average (SMA), maintaining negative momentum. The Relative Strength Index (RSI) stands at 45.30, indicating a stable market but approaching overbought territory, which could signal a potential short-term pullback. Currently, the index is testing a key support level around 25,000. Holding above this threshold is crucial for maintaining the bullish trend, while a drop below could prompt a correction, with the next support levels at 24,800 and 24,600. Monitoring these critical levels will be essential to gauge market resilience and potential downside risks. While the overall sentiment remains positive, traders should stay alert for signs of volatility.