INK Canadian Insider Index slips, but momentum improves

Thank you for joining us in a weekly technical look at the mid-cap oriented INK Canadian Insider (CIN) Index. The INK CIN retreated again last week, though it endured a much smaller hit than the week prior (falling 8.6 points vs 42.6 points). This slower rate of descent may provide bulls some hope their ride down this slippery slope is near its end. The Index closed at 1167.08 and has declined over 6.5% in the last 3 weeks.

Despite the fall in price, momentum improved. MACD rose from -9.2 to -4.2. RSI rose 36% and climbed from 20.70 to 28.10.

Support is at 1150 and 1175. Resistance is now at 1200 and 1215.

The Index is heavily oversold and appears due a substantial rebound over the next few weeks. The most recent comparable decline for the Index occurred in early February 2018 (when RSI plunged to 25) and from there the Index rebounded 80 points from its lows. This time around RSI plunged even deeper, registering a low around 16, generating an even more dramatic capitulation. In my opinion, this sets the stage for an equal or larger rally this time around.