TSX Momentum Turns Bullish: What Data Shows

The Canadian equities market, as measured by the Altra Market score, has recently shifted its momentum posture, moving from an "Improving" to a decidedly "Bullish" regime. This proprietary Altra Market score offers a snapshot of overall market breadth, reflecting the percentage of stocks exhibiting positive momentum across key Exponential Moving Averages (EMAs). A score of 76.6, firmly in the Bullish zone, suggests market breadth is healthy and that momentum-driven trading strategies are viable.

This positive shift is underpinned by robust participation across the market. A significant 81.67% of TSX stocks are currently trading above their 20-day EMA, a short-term trend indicator often watched by active traders. Looking at medium-term trends, 78.33% of stocks are above their 50-day EMA, while the long-term health is also encouraging with 73.33% above their 200-day EMA. These percentages indicate widespread strength rather than concentration in just a few large-cap names. Furthermore, market activity saw 41 advancing stocks against only 19 declining ones, reinforcing the positive sentiment. Over the past 15 days, the Altra Market score has seen a notable increase of 14.6 points, underscoring the accelerating bullish momentum.

Sectoral Breadth and Leadership

The Altra Market's robust health is also mirrored, to varying degrees, at the sector level. The Altra Sector score, similar to the Altra Market score, applies momentum analysis at the sector level and provides a relative strength rank against other sectors. Across the TSX, two sectors are currently in a bullish momentum regime, one is neutral, and three are bearish. Understanding this distribution provides a nuanced view of where strength and weakness lie.

Leading the pack are Financials, holding the #1 rank with no change from the previous week. This sector is classified as a "Confirmed leader," though its momentum appears to be cooling off slightly. Hot on its heels is Energy, maintaining its #2 rank and also deemed a "Confirmed leader," but notably, its momentum is accelerating. These two sectors are exhibiting clear leadership, aligning with the broader bullish market trend. Utilities, rising one spot to #3, are in a "Not yet confirmed" leader regime but are actively gaining relative strength, suggesting potential for continued upward movement.

Lagging Segments

On the other side of the spectrum, some sectors are still grappling with weakening momentum. Consumer Staples, now at #4, slipped one rank and is categorized as "Lagging," with its momentum weakening further. Materials, despite rising one rank to #5, remains "Lagging" though it is showing early signs of turning up. Technology, at the #6 spot and down one rank, is also "Lagging" and experiencing further momentum weakening. While the overall market indicates a healthy environment for momentum trades, these lagging sectors might present more challenging conditions for traders seeking upside opportunities. Investors and traders often use this type of sector data to identify areas of strength and weakness, helping to refine their approach in a dynamic market environment. The Altra Score, a 0-100 momentum score per stock derived from EMA alignment and RSI trend, can then be used to pinpoint individual high-probability setups within these leading sectors.

What is the Altra Market score? The Altra Market score measures overall market breadth — the proportion of stocks in an index trading above key moving averages. A score above 60 signals broad market participation and a healthy momentum environment. Below 40 signals broad weakness. It is updated daily after market close.

Track these scores daily on AltraOne — momentum analytics for NSE, S&P 500, and TSX, updated every trading day after market close.

Altra Score is a momentum indicator reflecting EMA alignment and RSI trend across daily, weekly, and monthly timeframes. It is not investment advice. Past momentum does not guarantee future performance. Please consult a SEBI-registered advisor before making investment decisions.