A Look at Technical Indicators for Silver Miners
Shareholder returns and stock trends
Coeur Mining (CDE) has generated investor returns of 10.1% in the trailing three-month period. Hecla Mining (HL), First Majestic Silver (AG), Tahoe Resources (TAHO), and Pan American Silver (PAAS) posted returns of 1.4%, -9.1%, 9.9%, and -7.6%, respectively, in the same period. Year-to-date (or YTD), until May 26, 2017, Pan American has had the highest returns at 17.5%, followed by Hecla at 15.1%. Tahoe is the only miner to have a negative return, at -2.0%.
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Usually, if a stock is trading below its 20-day or 50-day moving average, it’s an indication that the stock is oversold, and vice versa.
The above table shows the moving averages, forward target prices, and returns of five silver miners. As of March 26, 2017, all silver miners were trading above their 50-day and 20-day moving averages. Hecla Mining (HL), Coeur Mining (CDE), and First Majestic Silver (AG) are trading at 8.9%, 9.2%, and 3.6%, respectively, above their 50-day moving averages.
Relative strength index
Based on their closing prices on May 26, 2017, most silver miners are trading close to their overbought levels. While Coeur and Hecla are trading slightly above 70, First Majestic Silver, Tahoe Resources, and Pan American Silver have 14-day RSI levels of 67.1, 64.6, and 63.9, respectively. A 14-day RSI level of 70 and above is usually associated with overvalued assets, while a score of 30 or less generally implies assets approaching oversold levels.
Although technical indicators mean there could be a short-term pullback, you should note that the markets can remain overbought or oversold for extended periods. The iShares Silver Trust (SLV) is also near the overbought position at an RSI of 68.5.
In the next part, we’ll look at analysts’ views on these miners.