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What Mining Stock Technicals Tell Us about Recent Movements

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Jan. 5 2018, Updated 10:32 a.m. ET

A rebound among miners?

Precious metal mining companies have witnessed a rebound in their prices alongside precious metals. In this final part of our series, we’ll look at the performance of Alamos Gold (AGI), B2Gold (BTG), Royal Gold (RGLD), and Franco-Nevada (FNV).

Among these four miners, only Alamos Gold has seen a downtrend in its price on a YTD (year-to-date) basis, while B2Gold (BTG), Royal Gold (RGLD), and Franco-Nevada (FNV) have risen 25.7%, 36.9%, and 32.3%, respectively, during the same time frame. The VanEck Vectors Junior Gold Miners Fund (GDXJ) has seen a YTD gain of 8.6%. 

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Moving averages

All four of the miners that we’re discussing here are trading above their shorter-term 20-day moving average, likely due to the recent price rise. However, all of them except B2Gold are below their longer-term 100-day moving averages.

When a stock is trading reasonably below its 20-day and 100-day moving averages could mean a potential revival in prices. The current trading has been at a considerable discount to target prices, which indicates a possible rise in prices.

Relative strength index

AGI, BTG, RGLD, and FNV had RSI (relative strength index) scores of 61.3, 72.8, 80.2, and 54.7, respectively, as of December 27. These RSI levels rose significantly risen over the few days leading up to December 27 due to the revival reported by precious metals and mining stock prices. 

Remember, an RSI score below 30 indicates a potential rise in prices, while an RSI score above 70 indicates a probable fall in prices. GDXJ had an RSI level of 88.8 on December 27.

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