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Assessing Miners’ Relative Strength Index Scores

Meera Shawn - Author
By

May 15 2018, Updated 7:34 a.m. ET

Mining stock analysis

Markets were full of geopolitical tensions in April, boosting precious metals and miners’ stock prices. However, the US dollar later strengthened and the market unrest subsided, impacting precious metals and mining stocks.

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 Agnico Eagle Mines (AEM), Wheaton Precious Metals (SLW), AngloGold Ashanti (AU), and IAMGOLD. (IAG). In the last 30 days, AU has fallen 2.7%, while AEM, SLW, and IAG have risen 3.1%, 4.8%, and 197%, respectively.

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Volatility analysis

Implied volatility measures price fluctuations in an asset based on variations in the price of its call option. AEM, SLW, AU, and IAG have implied volatility of 23%, 30.8%, 34.1%, and 35.2%, respectively.

Relative strength index

As we’ve discussed, a stock’s RSI (relative strength index) score indicates whether it’s overbought or underbought. AEM, SLW, AU, and IAG have RSI scores of 54, 60.8, 44.6, and 75.6, respectively.

The Global X Silver Miners ETF (SIL) and the Sprott Gold Miners ETF (SGDM) recovered on May 10 as precious metals rebounded, rising 1.9% and 0.81%, respectively. However, they still stand at a year-to-date loss.

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