Most precious metal miners have seen an upswing in prices over the past few weeks. The rises and falls in precious metals are often reflected in mining stocks since precious metals are their core products.
In this part of the series, we’ll look at some important technical indicators, including volatility figures and RSI (relative strength index) levels, for major mining stocks such as B2Gold (BTG), Silver Wheaton (SLW), Buenaventura Mining (BVN), and Hecla Mining (HL).
Call-implied volatility is a measurement of the fluctuations in an asset’s price when it comes to fluctuations in the price of its call option. As of September 1, 2017, the call volatilities for Silver Wheaton, Buenaventura Mining, and Hecla Mining were 39.8%, 49.5%, and 52.7%, respectively. The volatilities of mining stocks are usually greater than the volatilities of precious metals.
The 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. B2Gold, Silver Wheaton, Buenaventura Mining, and Hecla have RSI levels of 66.7, 74.0, 73.4, and 69.2, respectively. There’s been a significant rebound in the prices of precious metals.
These four miners have 30-day trailing gains since last month, which was good for mining stocks. Only Hecla Mining has a 30-day trailing loss.
Mining-based funds such as the VanEck Vectors Gold Miners ETF (GDX) and the Sprott Gold Miners ETF (SGDM) are also affected by changes in precious metal prices. These two funds have risen 5.9% and 6.7%, respectively, year-to-date.