The decline in precious metals on February 27, 2018, also led most of the mining shares to decline. Although these mining companies are a part of the equity sector, they take their price directions from the precious metals that they mine—their core assets.
In this article, we’ll look at technical readings such as moving averages and relative strength index (or RSI) readings for the miners. The miners we’ve selected for analysis are Gold Fields (GFI), Barrick Gold (ABX), Hecla Mining (HL), and IAMGOLD (IAG). These miners fell on February 27.
These miners also reported year-to-date (or YTD) losses. GFI, ABX, HL, and IAG have dropped 10.5%, 18.7%, 5.5%, and 9.6%, respectively.
Gold Fields, Barrick Gold, Hecla Mining, and IAMGOLD are trading below their 20-day and 100-day moving averages. The three-month returns of these miners are negative.
A considerable discount to a moving average could indicate a potential rise in price while a significant premium could indicate a possible drop in price. The target prices for all four miners are higher than their current trading prices, suggesting a positive outlook for miners.
Relative strength index
GFI, ABX, HL, and IAG had RSI readings of 37.6, 21.8, 54.3, and 47.1, respectively, on February 27. The VanEck Vectors Gold Miners ETF’s (GDX) RSI score is 42.6. An RSI score above 70 suggests a potential downward correction in prices, while a score below 30 indicates a possible upward price correction.