Mining stock analysis
Recently, the unrest in the markets has had a significant effect on precious metals and the US dollar. The US dollar has a prominent role in influencing dollar-denominated precious metals and mining stocks.
In this part of the series, we’ll look at miners’ RSI (relative strength index) scores and implied volatilities. The miners we’ve selected for our analysis are New Gold (NGD), Wheaton Precious Metals (SLW), Kinross Gold (KGC), and IAMGOLD (IAG).
In the last 30 days, miners have seen mixed performances. NGD has fallen 2.1% on a trailing-30-day basis. SLW, KGC, and IAG have risen 7.3%, 5.9%, and 6.9%, respectively, in the same period.
Implied volatility measures price fluctuations in an asset based on changes in the price of its call option. NGD, SLW, KGC, and IAG have implied volatilities of 52.7%, 30.8%, 46.9%, and 42.9%, respectively.
A stock’s RSI score indicates whether it’s overbought or underbought. An RSI level of 70 suggests that a stock could be overbought and that its price could fall. An RSI level of below 30 indicates that a stock could be oversold and that its price could rise. NGD, SLW, KGC, and IAG have RSIs of 42.4, 74.8, 53.4, and 56.5, respectively.
The Global X Silver Miners ETF (SIL) and the VanEck Vectors Junior Gold Miners ETF (GDXJ) have also been carefully tracking precious metals. These two funds rose 1% and 2.4%, respectively, on April 11. However, they’ve seen year-to-date falls of 5.9% and 2.2%, respectively.