Analyzing Miners’ Core Technicals in September



Technical details

As mining companies are known to closely track precious metals, in this article, we’ll look at how a few miners have moved over the past month as well as their technical indicators. We’ll look at the RSI (relative strength index) readings and implied volatility for these miners.

The four miners we’ll discuss are Silver Wheaton (SLW), Franco-Nevada (FNV), Kinross Gold (KGC), and Harmony Gold (HMY).

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Implied volatility

Call-implied volatility measures the changes that occur in a stock’s price with respect to the variation in the stock’s call option price. On September 15, Silver Wheaton, Franco-Nevada, Kinross Gold, and Harmony Gold had volatilities of 30.8%, 22.8%, 38.5%, and 53.1%, respectively. The volatility of mining stocks is often greater than the volatility of metals.

RSI indicator

A stock’s RSI indicator helps us evaluate whether a stock is undervalued or overvalued. If a stock’s RSI score is above 70, it must be overbought, and its price may soon fall. If a stock’s RSI score is below 30, it could be oversold and might correct upward.

The RSI scores for the miners mentioned above have recuperated recently. Silver Wheaton, Franco-Nevada, Kinross Gold, and Harmony Gold have RSI scores of 50.3, 54.3, 72.1, and 71.3, respectively. All four miners have also seen a considerable rise over the past 30 trading days. They rose 6.8%, 3.3%, 15.6%, and 22.3%, respectively.

Among the mining funds that also closely follow the trend of precious metals are Vaneck Vectors Gold Miners (GDX) and Global X Silver Miners (SIL). These two funds have 30-day trailing losses of 2.4% and 2.9%, respectively.


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