Mining stock analysis
The recent unrest in the markets has had a significant effect on precious metals and mining companies. 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 Goldcorp (GG), Agnico-Eagle Mines (AEM), Wheaton Precious Metals (SLW), and AngloGold Ashanti (AU).
In the last 30 days, the miners increased due to the revival of precious metals. GG, AEM, SLW, and AU have surged 7.8%, 15.3%, 10%, and 2.1%, respectively, during the last one month.
Implied volatility measures price fluctuations in an asset based on changes in the price of its call option. GG, AEM, SLW, and AU have implied volatilities of 30.3%, 30%, 30.8%, and 36.7%, respectively.
A stock’s RSI score indicates whether it’s overbought or underbought. An RSI level of 70 and above suggests that a stock could be overbought and that its price could fall. An RSI level lower than 30 indicates that a stock could be oversold and its price could rise. GG, AEM, SLW, and AU have RSI levels of 77, 78.9, 85, and 43.7, respectively.
The iShares MSCI Global Gold Min (RING) and the VanEck Vectors Gold Miners ETF (GDX) have also been carefully tracking precious metals. These two funds rose 0.71% and 0.22%, respectively, on April 18, 2018.