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What’s the Directional Move of Mining Stocks in November?

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Dec. 4 2020, Updated 10:53 a.m. ET

Analyzing mining stocks

In order to analyze the performance of the precious metals market, it’s important to look at the core mining stocks and their technical details. In this series, we’ll look at technical indicators such as moving averages and YTD (year-to-date) three-month returns.

We’ll compare the performances of First Majestic Silver (AG), Newmont Mining (NEM), Silver Wheaton (SLW), and Randgold Resources (GOLD). NEM, SLW, and GOLD have YTD (year-to-date) gains of 4.8%, 4.6%, and 18.6%, respectively, while AG has a YTD loss of 13.9%.

 

The VanEck Vectors Junior Gold Miners ETF (GDXJ) tracks the movement of gold and has risen 1.1% YTD.

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Moving averages

All four miners mentioned above are trading below their shorter-term, 20-day moving averages. They’re also at a discount to their longer-term, 100-day moving average, except Silver Wheaton, which is marginally above its 100-day moving average.

The four miners’ target prices are above their current trading prices, which points to a potential increase in prices.

RSI indicator

The RSI (relative strength index) levels for AG, NEM, SLW, and GOLD are 42.6, 37.0, 44.6, and 28.1, respectively. An RSI level lower than 30 indicates a possible upward movement in price, while an RSI level higher than 70 indicates a possible downturn in price.

Recently, GDXJ’s RSI was 41.3, indicating that it could rise.

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