Relative Strength Index Indicators of Mining Shares in October



Mining shares indicators

When considering mining stocks, you should consider crucial indicators such as RSI (relative strength index) levels and call-implied volatility. Call-implied volatility is used to measure the fluctuations in the price of an asset given the changes in the price of its call option.

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

In this final part of our series, we’ll compare Randgold Resources (GOLD), Pan American Silver (PAAS), Barrick Gold (ABX), and Kinross Gold (KGC).

The VanEck Vectors Gold Miners ETF (GDX) and the iShares MSCI Global Gold Miners (RING) rose on Wednesday, October 11, 2017, by 0.98% and 0.68%, respectively.

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Call-implied volatility and RSI

On October 11, 2017, Randgold Resources, Pan American Silver, Barrick Gold, and Kinross Gold had implied volatility readings of 25.0%, 34.0%, 29.1%, and 41.6%, respectively. Mining stock volatility is often higher than the volatility of precious metals.

The above mining stocks’ RSI scores have recuperated recently. Randgold Resources, Pan American Silver, Barrick Gold, and Kinross Gold have RSI scores of 53.9, 54.6, 64.1, and 60.0, respectively. These RSI levels rose recently after falling considerably at the end of September.


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