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A Quick Technical Analysis of Key Mining Stocks Today

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Dec. 13 2017, Updated 11:58 a.m. ET

A quick look at miners

In this part, we’ll investigate the call implied volatility and RSI (relative strength index) indicators for four select mining stocks: Sibanye Gold (SBGL), Gold Fields (GFI), Barrick Gold (ABX), and Iamgold (IAG).

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Volatility reading

Sibanye, Gold Fields, Barrick, and Iamgold have call implied volatilities of 48.1%, 37.3%, 24.8%, and 40.4%, respectively. Remember, the volatility of these miners is often higher than the volatility in precious metals.

Most major mining stocks have seen falling prices over the past few weeks.

RSI levels

The RSI readings for the above four miners help us determine the relative overbought or underbought situation of precious metal miners in general. SBGL, GFI, ABX, and IAG now have RSI levels of 39.9, 35.7, 42.3, and 33.7, respectively. As we noted in the preceding part of this series, if a stock’s RSI score is higher than 70, it might be overvalued, and the price could decline. But if a stock’s RSI level is below 30, it could be undervalued, and its price could increase.

The funds that are closely related to precious metals include the iShares MSCI Global Gold Min (RING) and the VanEck Vectors Junior Gold Miners Fund (GDXJ). These two funds have witnessed declines in their prices over the past month due to the decline in precious metal prices, and all the four of the above mining stocks are showing 30-day trailing losses.

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