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What Mining Stocks’ Technical Indicators Suggest

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Miners’ technicals

Most of the miners have seen an upswing in their prices over the past week. The last trading day in July saw ups and downs in mining stocks’ price movements. Often, mining stocks follow the metals they mine. However, the two sometimes diverge.

In this article, we’ll look at some important technical indicators including volatility figures and RSI levels for major mining stocks like New Gold (NGD), Newmont Mining (NEM), Agnico-Eagle Mines (AEM), and Primero Mining (PPP).

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Implied volatility

The call-implied volatility is a measurement of the fluctuations in an asset’s price when it comes to the fluctuations of the price of its call option. On July 31, 2017, New Gold, Newmont, Agnico-Eagle, and Primero had volatilities of 45.7%, 24.5%, 29.7%, and 90.6%, respectively. The volatilities of mining stocks are usually greater than the volatilities of precious metals.

RSI

RSI (relative strength index) is a measurement that indicates whether a stock has been overbought or oversold. If a stock’s RSI is above 70, it may be overbought, and its price may fall. If a stock’s RSI is below 30, it could be oversold and might correct upward.

RSI levels for the miners mentioned above have recently witnessed revivals. New Gold, Newmont, Agnico-Eagle, and Primero have RSI levels of 67.2, 81.3, 63.7, and 72.2, respectively. There’s been a significant rebound in the prices of precious metals.

Mining-based funds like the VanEck Vectors Junior Gold Miners (GDXJ) and the Global X Silver Miners (SIL) are also affected by changes in precious metal prices. These two funds have risen 3.5% and 3.2%, respectively, on a five-day trailing basis.

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