Reading the Volatility Figures and RSI Levels for Miners


Mar. 26 2018, Published 10:40 a.m. ET

Mining stock analysis

Miners had a good start to 2018 with an upswing in prices due to the revival in precious metals. However, as precious metals slumped after that, so did the mining shares. The recovery in precious metals on March 21—after the Federal Open Market Committee hiked interest rates—gave a spark to these mining shares. March 22 was, however, a mixed day for the miners.

In this part of the series, we’ll look at miners’ RSI levels and implied volatility levels. The miners we’ve selected for our analysis are Goldcorp (GG), New Gold (NGD), Agnico Eagle Mines (AEM), and Eldorado Gold (EGO).

These four miners have experienced declining prices over the past 30 trading days. NGD, AEM, and EGO fell 3.1%, 0.42%, and 15.6%, respectively. GG has increased 4.1%.

Among the gold and silver funds, the VanEck Vectors Junior Gold Miners ETF (GDXJ) and the Global X Silver Miners ETF (SIL) fell 1.4% and 1.1%, respectively, on March 22.

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Volatility analysis

Implied volatility measures the price fluctuations in an asset given the changes in the price of its call option. GG, NGD, AEM, and EGO have implied volatilities of 31.0%, 55.2%, 29.5%, and 83.3%, respectively.

RSI readings

A stock’s RSI (relative strength index) level indicates whether it’s overbought or underbought. When a stock’s RSI level is above 70, it shows that the stock could be in overbought territory and that its price could decline. When a stock’s RSI level is lower than 30, it indicates that the stock could be oversold and that its price could rise.

GG, NGD, AEM, and EGO have RSI levels of 65.3, 44.3, 65.3, and 25.0, respectively.


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