Reading the Technicals of Mining Shares


Dec. 4 2020, Updated 10:53 a.m. ET

Miners fell once again

As we know, precious metal mining companies tend to react to the changes in the metals they mine. The fluctuations in these companies are more dependent on metals than the broader equity markets.

After the revival on Friday, June 29, Monday was another choppy day. Let’s look at the technicals for four miners: Sibanye Gold (SBGL), Agnico-Eagle Mines (AEM), Hecla Mining (HL), and Iamgold (IAG). These miners have YTD (year-to-date) losses of 50.2%, 0.76%, 12.3%, and 0.34%, respectively, as of June 29.

The last three months were choppy for SBGL and HL, which fell 36.9% and 5.2%, respectively. During the same period, AEM and IAG rose 8.9% and 11.9%, respectively. The VanEck Vectors Gold Miners ETF (GDX), a mining-based fund, has a YTD loss of 4% and a three-month rise of 1.5%.

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Moving average indicators

SBGL and HL are trading at considerable discounts to their 20-day and 100-day moving averages. AEM is trading above its 20-day and 100-day moving averages. IAG is trading below its shorter-term 20-day moving average but above its 100-day moving average. When a stock trades at a significant discount to its moving average, the trend usually suggests a potential price increase, while a considerable premium indicates a fall in price. All four miners’ target prices are considerably higher than their current trading prices, suggesting a potential uptrend.

RSI scores

On June 29, SBGL, AEM, HL, and IAG had RSI scores of 37.9, 54.3, 27, and 48.5, respectively. GDX had an RSI score of 44.6. An RSI score above 70 suggests an impending downward price correction, while a score below 30 indicates an upward price correction.


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