Miners and Their Moving Averages
In this final part of the series, we’ll focus on miners’ moving averages and RSI (relative strength index) readings. The miners we’ve selected for analysis are Sibanye Gold (SBGL), Royal Gold (RGLD), New Gold (NGD), and Franco-Nevada (FNV).
Among the four miners we’re covering in this part, all of them have witnessed a fall in price on a YTD (year-to-date) basis. SBGL, RGLD, NGD, and FNV have fallen 19.8%, 1.4%, 21.9%, and 13.7%, respectively, YTD. The YTD return for the VanEck Vectors Gold Miners ETF (GDX) is -6.7%.
Interested in GDX? Don't miss the next report.
Receive e-mail alerts for new research on GDX
The returns for all the above miners and GDX over the past three months are negative.
All four miners we’re covering are trading significantly below their 20-day and 100-day moving averages. A huge premium over the 20-day and 100-day moving averages is an indicator that a stock’s price may correct downward. A massive discount to the 20-day and 100-day moving averages could suggest a potential upward reversion in a stock’s price.
The target prices of all the miners are above their current trading prices, which could indicate a positive outlook.
SBGL, RGLD, NGD, and FNV have RSI levels of 19.9, 33.8, 28.3, and 23.6, respectively. GDX has an RSI level of 29.1. An RSI level below 30 indicates a possible rise in price, while an RSI score above 70 indicates a probable fall in price.