Usually, precious metal mining companies follow precious metals for price direction. Precious metals increased on Monday, April 16, 2018, as did most mining stocks.
In this part of the series, we’ll look at the primary technical readings including moving averages and RSI (relative strength index) scores for a select group of miners. The miners we’ve selected for analysis are B2Gold (BTG), Gold Fields (GFI), Yamana Gold (AUY), and Hecla Mining (HL). These stocks have risen on a YTD basis by 5.2%, 8.8%, 4.5%, and 3.5%, respectively.
All the above four miners rose on April 18, 2018, due to the upswing in precious metals. BTG, GFI, AUY, and HL were up 1%, 1%, 1.4%, and 1.9%, respectively. The VanEck Vectors Junior Gold Miners Fund (GDXJ) was up 0.95% on Wednesday. It has a YTD loss 0.47%.
Moving average analysis
Among the four miners that we are discussing, BTG, AUY, and HL are trading above their shorter-term 20-day moving average. GFI is trading below both its 100-day and 20-day moving averages. A stock trading at a huge discount to its moving average indicates a potential rise in price, while a significant premium shows a fall. All four miners have target prices considerably above their current trading prices, which is a positive indicator.
Relative strength index
On April 18, 2018, BTG, GFI, AUY, and HL had RSI levels of 75, 42.6, 65.5, and 63.2, respectively. The VanEck Vectors Junior Gold Miners ETF had an RSI level of 74.5. An RSI number above 70 suggests a possible downward price correction, while a score below 30 indicates an upward price correction.