A Brief Technical Analysis of the Miners in October 2017

Technical indicators

When considering mining stocks, investors should consider crucial indicators like RSI (relative strength index) levels and call implied volatility. Call implied volatility is used for measuring the fluctuations in the price of an asset given the fluctuations in the price of its call option.

RSI shows whether a stock has been overbought or oversold. If a stock’s RSI score is above 70, it may be overbought, leading the price to soon correct downward. If the stock’s RSI score is below 30, it could be oversold and may rapidly increase.

A Brief Technical Analysis of the Miners in October 2017

In this final part of our series, we’ll compare New Gold (NGD), Newmont Mining (NEM), Sibanye Gold (SBGL), and Gold Fields (GFI).

The VanEck Vectors Junior Gold Miners (GDXJ) and the iShares MSCI Global Gold Min (RING) witnessed an upward streak in prices on Monday, October 9, increasing 1.1% and 0.99%, respectively.

Call implied volatility and RSI

On October 9, 2017, New Gold, Newmont, Sibanye, and Gold Fields had implied volatility readings of 51.3%, 25.9%, 63%, and 40.4%, respectively. Mining stock volatility is often higher than the volatility of the precious metals.

The above mining stocks’ RSI scores have recuperated recently. New Gold, Newmont, Sibanye, and Gold Fields now have RSI scores of 59, 51.9, 51.7, and 38.8, respectively. These RSI levels had recently risen after their considerable drop during the end of September.