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The Technical Details of Mining Shares

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Nov. 16 2017, Published 2:28 p.m. ET

Technical indicators

In this part of the series, we’ll look at the technical readings of key mining stocks, including their RSI (relative strength index) levels and call implied volatilities.

Call implied volatility is a measurement tool. RSI reads whether a stock is overbought or oversold. Levels above 70 suggest that the stock is overbought, while levels below 30 suggest that the stock is oversold.

The Sprott Gold Miners ETF (SGDM) and the VanEck Vectors Junior Gold Miners ETF (GDXJ) witnessed a fall in prices on November 10, 2017. These ETFs have risen 7.9% and 5.4%, respectively.

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Volatility and RSI levels

On November 15, 2017, mining stocks Sibanye Gold (SBGL), Silver Wheaton (SLW), Randgold Resources (GOLD), and Harmony Gold (HMY) had implied volatility readings of 63%, 30.8%, 25%, and 53.3%, respectively. SBGL, SLW, GOLD, and HMY have RSI scores of 65.5, 53.1, 39.6, and 61.5, respectively.

During the past 30 trading days, Sibanye Gold and Silver Wheaton have a 30-day trailing gain of 10.5% and 1.3%, respectively. Randgold and Harmony have 30-day trailing losses of 7.7% and 3.2%, respectively. 

The past month has also been adverse for most mining stocks. The US dollar had been rising, and news of a possible interest rate hike caught investors’ attention. Precious metals, however, managed marginal gains.

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