Reading Mining Stocks’ Technicals in 2018


Feb. 16 2018, Updated 2:50 p.m. ET

Mining stock analysis

Miners had a good start to 2018. They saw an upswing in prices due to precious metals’ revival. As the precious metals fell, so did the mining stocks. In this part, we’ll discuss miners and their technical indicators including RSI (relative strength index) levels and implied volatility. The miners we have selected for our analysis are Wheaton Precious Metals (SLW), Barrick Gold (ABX), AngloGold Ashanti (AU), and IAMGOLD (IAG).

All four of the miners have experienced a price slump in the past 30 trading days, except IAMGold. Wheaton Precious Metals, Barrick Gold, and AngloGold Ashanti fell 8.9%, 9.7%, 3.2%, respectively. IAMGOLD rose 1% marginally.

Gold and silver funds that also take their price direction from precious metals include the Physical Swiss Gold Shares (SGOL) and the Physical Silver Shares (SIVR). The funds recovered their price in the last few days. They had a five-day trailing gain of 2.8% and 3.4%, respectively.

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Volatility analysis

Implied volatility is a measurement of the price fluctuations in precious metals given the changes in the prices of their call options. Wheaton Precious Metals, Barrick Gold, AngloGold Ashanti, and IAMGOLD have implied volatility figures of 30.8%, 34.2%, 42.1%, and 46.1%, respectively.

RSI readings

A stock’s RSI level indicates whether it’s overbought or underbought. When a stock’s RSI level is higher than 70, it shows that the stock could be in overbought territory and that its price could fall. When a stock’s RSI level is lower than 30, it indicates that the stock could be oversold and that its price could rise. Wheaton Precious Metals, Barrick Gold, AngloGold Ashanti, and IAMGOLD have RSI levels of 29.7, 28.1, 35.5, and 52.3, respectively.


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