uploads///RSI

Analyzing Miners’ Implied Volatility

By

Apr. 10 2018, Updated 4:47 p.m. ET

Mining stock analysis

Recently, the unrest in the markets has had a big effect on precious metals and the US dollar. The US dollar has a big impact on dollar-denominated precious metals and also on mining companies. In this part of the series, we’ll look at miners’ RSI (relative strength index) scores and implied volatility. The miners we’ve selected for our analysis are First Majestic Silver (AG), B2Gold (BTG), Royal Gold (RGLD), and Goldcorp (GG).

In the last 30 days, miners have seen a mixed performance. AG, RGLD, and GG have rebounded 6.9%, 4.3%, and 7.1%, respectively, on a 30-day trailing basis, while BTG has dropped 6.2%.

Article continues below advertisement

Volatility analysis

Implied volatility measures price fluctuations in an asset based on changes in the price of its call option. AG, BTG, RGLD, and GG have implied volatilities of 53.4%, 61.8%, 25%, and 33.5%, 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 indicates the stock could be oversold and that its price could rise. AG, AGI, RGLD, and GG have RSI scores of 57.7, 47.4, 56.3, and 60.4, respectively.

The Global X Silver Miners (SIL) and the VanEck Vectors Gold Miners (GDX) funds have also been closely tracking precious metals. SIL and GDX have seen YTD losses of 8.6% and 5.4%, respectively, while they have also fallen during the past few trading days.

Advertisement

More From Market Realist

  • Steel coils at a X plant
    Basic Materials
    U.S. Steel Stock (X) Could Rise More Amid Commodity Supercycle
  • New home construction
    Basic Materials
    How Investors Can Play Surging Lumber Prices in 2021
  • MP Materials mine
    Basic Materials
    MP Materials (MP) Is an Attractive Play on Rare Earths
  • Woman looking at data
    Basic Materials
    Should You Buy SLV Stock Before Another Silver Short Squeeze?
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.