How Do Miners’ Technicals Look?


Mar. 29 2018, Updated 3:15 p.m. ET

Mining stock analysis

It was widely expected that precious metals and miners would react negatively after the FOMC (Federal Open Market Committee) meeting. However, as the FOMC announced that there would be only two hikes this year instead of three, metals rose alongside miners. The dollar increase Wednesday proved negative for metals and miners. 

In this part of the series, we’ll look at miners’ RSI (relative strength index) scores and implied volatility. Miners we’ve selected for our analysis are New Gold (NGD), Agnico-Eagle Mines (AEM), Franco-Nevada (FNV), and Barrick Gold (ABX).

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In the last 30 days, the miners have seen mixed performances. Many of the miners dropped when precious metals fell earlier this month and then rebounded after the Fed hike. AEM and ABX have risen 8.7% and 7.6% on a 30-day trailing basis, while FNV was down 4.4%. NGD was almost flat during the same timeframe.

Volatility analysis

Implied volatility measures price fluctuations in an asset based on changes in the price of its call option. NGD, AEM, FNV, and ABX have implied volatilities of 53.9%, 30.2%, 25.6%, and 31.7%, respectively.

RSI readings

A stock’s RSI score indicates whether it’s overbought or underbought. An RSI level of 70 suggests the stock could be overbought and that its price could fall, and an RSI level below 30 suggests the stock could be oversold and that its price could rise. NGD, AEM, FNV, and ABX have RSI scores of 51.6, 66.5, 47.4, and 62.4, respectively.

Mining stocks like the VanEck Vectors Junior Gold Miners (GDXJ) and the iShares MSCI Global Gold Min (RING) were also down on Wednesday by 2.3% and 1.9%, respectively.


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