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A Look at Miners’ Technical Details

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Mar. 15 2018, Updated 12:49 p.m. ET

Mining stock performances

Precious metal mining companies have had mixed reactions over the past few days. On Wednesday, March 14, 2018, precious metals fell, but miners had a mix of ups and downs. With more monetary tightening likely coming in 2018, experts are expecting precious metals and precious metal miners to underperform. In this part of the series, we’ll analyze miners Royal Gold (RGLD), New Gold (NGD), Agnico-Eagle Mines (AEM), and Franco-Nevada (FNV) and their technical indicators.

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All four miners that we’ve selected for analysis have declined over the past month. RGLD, NGD, AEM, and FNV fell 1.6%, 16.2%, 12.5%, and 7.6%, respectively, on a 30-day trailing basis. Mining-based funds that closely react to the changes in precious metals are the VanEck Vectors Junior Gold Miners ETF (GDXJ) and the Global X Silver Miners ETF (SIL), which have risen 1.5% and 3.3%, respectively, on a 30-day trailing basis.

Volatility analysis

The implied volatility reading of mining stocks measures the change in the price of the asset with respect to the fluctuations in the price of its call option. RGLD, NGD, AEM, and FNV have implied volatility figures of 23.1%, 57.8%, 26.9%, and 24%, respectively.

RSI readings

RSI (relative strength index) levels provide insight into whether a stock is overbought or underbought. When a stock’s RSI level is above 70, it shows that the asset could be in overbought territory, so its price might correct downward. 

When a stock’s RSI indicator is below 30, it suggests that the stock may be oversold and its price could increase. An index above 70 indicates an overbought scenario and a possible downward price correction. RGLD, NGD, AEM, and FNV have RSI levels of 55.5, 33.3, 46.9, and 37.2, respectively.

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