Reading Key Mining Stock Movements at the End of October


Nov. 1 2017, Published 1:27 p.m. ET

Miners’ reactions

Most of the mining shares witnessed an uptrend in prices on Monday, October 30, 2017, with all mining companies gaining that day. Typically, we expect mining stocks to follow the trend set by precious metals, but there’s always a chance that mining stocks can deviate some days.

Below, we’ll discuss the moving averages and RSI (relative strength index) levels of Alamos Gold (AGI), Goldcorp (GG), Newmont Mining (NEM), and Silver Wheaton (SLW).

Newmont Mining and Silver Wheaton have seen YTD (year-to-date) gains of 6.3% and 9.8%, respectively, while Goldcorp and Alamos have seen YTD losses of 1.6% and 5.1%, respectively. Notably, the VanEck Vectors Gold Miners Fund (GDXJ) has seen a YTD gain of 8.8%.

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Long and short-term averages

Alamos and Newmont are trading below their 20-day moving averages, while Goldcorp and Silver Wheaton are trading above their 20-day moving averages. Only Alamos is trading below its longer-term 100-day moving average, but the rest of these miners are trading above their 100-day moving averages.

A reasonably high premium on the 20-day and 100-day moving averages means that the prices could fall. A reasonable discount below the 20-day and 100-day moving averages can mean that the prices could bounce soon. 

All four of the above mining stocks have current prices below their target prices, which highlights a positive outlook. AGI, GG, NEM, and SLW have RSI levels of 32.3, 52.4, 32, and 67.5, respectively. RSI levels have fallen due the falls in the stocks’ prices. An RSI above 70 tells us that the stock might be overpriced, while an RSI below 30 hints that the stock could be underpriced.


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