How Silver Miners Are Reacting to the Slump in Silver


Oct. 11 2020, Updated 11:06 a.m. ET

Miners’ performances

Usually, precious metal mining companies follow precious metals. Precious metals have risen over the past few days, supporting mining companies.

In this part of the series, we’ll look at the primary technical readings—moving averages and RSI (relative strength index) scores—of a select group of miners. The silver miners we’ve selected for analysis are First Majestic Silver (AG), Wheaton Precious Metals (SLW), Coeur Mining (CDE), and Hecla Mining (HL). All these silver mining companies, except Coeur Mining, have fallen on a YTD (year-to-date) basis. CDE has increased 10.1%, while AG, SLW, and HL have YTD losses of 4%, 4.9%, and 4.8%, respectively. The silver mining fund we’ve added to this discussion is the Global X Silver Miners ETF (SIL), which fell 5.8% during the same period.

The stock of our four miners—AG, SLW, CDE, and HL—fell on April 23 by 4%, 1.3%, 5.6%, and 3.6%, respectively.

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Moving averages

AG, SLW, and CDE are trading above their 20-day and 100-day moving averages, while HL is trading above its 20-day moving average and below its 100-day moving average.

A stock trading at a considerable discount to its moving average suggests a potential rise in price, while a significant premium indicates a decline. All four miners’ target prices are considerably higher than their current trading prices, suggesting a potential rise.

Relative strength index scores

On April 23, AG, SLW, CDE, and HL had RSI (relative strength index) scores of 60.4, 58.4, 56.2, and 61.3, respectively. The Global X Silver Miners ETF (SIL) had an RSI score of 53.6. An RSI score above 70 suggests an impending downward price correction, while a score below 30 indicates an upward price correction.


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