Mining stock analysis
Miners had a good start to 2018 with an upswing in prices due to the revival of precious metals. However, as precious metals slumped, so did the mining shares. In this part of the series, we’ll look at miners’ RSI levels and implied volatility. The miners we’ve selected for our analysis are Agnico Eagle Mines (AEM), Yamana Gold (AUY), Kinross Gold (KGC), and Iamgold (IAG).
These four miners have experienced a fall in their prices over the past 30 trading days. AEM, AUY, KGC, and IAG fell 7.7%, 15.7%, 7.1%, and 14.8%, respectively. The gold and silver funds like the Physical Swiss Gold Shares (SGOL) and the Physical Silver Shares (SIVR) have also declined during the last week due to expectations of an interest rate hike. These stocks were down 0.51% and 1.4%, respectively, on a five-day trailing basis.
Implied volatility measures the price fluctuations in an asset given the changes in the price of its call option. AEM, AUY, KGC, and IAG have implied volatilities of 27.9%, 52.2%, 42.6%, and 44.2%, respectively.
A stock’s RSI (relative strength index) 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. AEM, AUY, KGC, and IAG have RSI levels of 59.4, 28.3, 58.5, and 32.4, respectively.