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How Are Mining Stocks Moving?

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Oct. 27 2017, Published 5:46 a.m. ET

Mining stocks fell

Most of the mining stocks fell as precious metals fell on Friday, October 20. Miners tend to track precious metals. However, that’s not always the case. In this series, we’ll study some technical details of mining stocks like moving averages and YTD three-month returns. We’ll compare the performances of New Gold (NGD), Franco-Nevada (FNV), Eldorado Gold (EGO), and Harmony Gold (HMY).

New Gold and Franco-Nevada have YTD gains of 2.3% and 31.3%, respectively, while Eldorado and Harmony have YTD losses of 54% and 26.7%, respectively. The mining-based VanEck Vectors Gold Miners (GDX) rose 9.7% on a year-to-date basis.

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Moving averages

All four miners except Franco-Nevada are trading below their 20-day moving average. Newmont and Yamana are above their 100-day moving average, while the other two continue to remain below it. A significant discount below the 20-day and 100-day moving averages suggests a possible revival in price, while a premium suggests a probable fall. The target prices of these four miners, except Franco-Nevada, continue to be higher than their current trading price while suggesting a positive outlook for these miners.

RSI levels

Due to the falling precious metal prices in the past week, mining stocks and their RSI levels have also fallen. NGD, FNV, EGO, and HMY now have RSI levels of 40.5, 62.4, 17.7, and 23.8, respectively. In general terms, an RSI level lower than 30 indicates a potential upward movement in price, while an RSI below 70 suggests the possibility of a downturn in prices.

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