Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Jun 17, 2020
Technical Indicators Point to a Downward Move for Gold Mining Stocks

Technical Indicators Point to a Downward Move for Gold Mining Stocks

Over the last few days the Tickeron A.I.dvisor has generated several signals that point to a downward move for the gold mining industry.

First there was a signal on the Direxion Daily Gold Miners Index Bull 2X (NYSE: NUGT) that come from the momentum indicator and shows the odds of success at 89%. There were 103 similar cases for backtesting and 92 of them proved successful.

Direxion Daily Gold Miners Bull 2X ETF (NUGT, $63.34) enters Downtrend as Momentum indicator drops below 0 level on Jun 11, 2020

This indicator may be signaling that NUGT's price has further to drop, since it fell below its price logged 14 days ago. Traders may consider selling the stock, shorting the stock, or exploring put options. A.I.dvisor backtested 103 similar cases where NUGT's Momentum Indicator fell below the 0 level, and 92 of them led to a successful outcome. Odds of Success: 89%.

The same day that signal was generated, there was a bullish signal on the Direxion Daily Gold Miners Index Bear 2X (AMEX: DUST). Seeing a bearish signal on the bullish ETF and a bullish signal on the inverse ETF makes sense, in fact, you would expect such a thing.

Direxion Daily Gold Miners Bear 2X ETF (DUST, $31.48) enters Uptrend as Momentum indicator ascends above 0 level on Jun 11, 2020

This indicator may be signaling that DUST's price has momentum to move higher, since its current price exceeds the price logged 14 days ago. Traders may consider buying the stock or exploring call options. A.I.dvisor backtested 100 similar cases where DUST's Momentum Indicator exceeded 0, and 86 of them led to a successful outcome. Odds of Success: 86%.

After seeing these two signals, I started looking at the gold mining group on the Tickeron screener. There are 19 stocks in the group with the most notable companies in this group being Newmont Goldcorp Corp (NYSE:NEM), Barrick Gold Corp. (NYSE:GOLD), Wheaton Precious Metals Corp (NYSE:WPM), Kirkland Lake Gold Ltd (NYSE:KL), and Kinross Gold Corp. (NYSE:KGC).

Companies in the gold industry are engaged in exploring and mining for gold. Gold is largely used in jewelry, art and it has some industrial uses as well. Gold is often viewed as a safe harbor investment and the metal itself tends to move higher when the global economy is in chaos.

Breaking down the companies in the group, I took note that 15 out of the 19 companies had also received bearish signals from the momentum indicator in the last three days. That coincides with the bearish signal on the NUGT ETF. All 15 of the signals showed odds of success of at least 55% and 10 of them showed odds of success of over 70%.

From the technical analysis screen I jumped over to the Fundamental Analysis screen to review the fundamentals of the 19 stocks to see if the bearish signals matched up with the fundamental ratings.

There are six different indicators that can be scored and in the case of the stocks in the gold mining group, 17 of the 19 had more negative indicators than positive ones. Some of the indicators could be neutral, so my statement doesn't mean that all 17 of those stocks had four negative signals and only two bullish signals. Some were two bearish to one bullish reading. For the two that didn't have more negative readings than positive ones, one stock was tied at two to two and one showed three positive and only one negative (Harmony Gold).

One particular indicator from the fundamentals that I use extensively is the SMR Indicator. The indicator represents sales growth, profit margin, and return on equity. In the case of the 19 stocks in the gold mining group, 17 have SMR ratings of 67 or higher—meaning below average in this category. There was one stock that had a neutral reading and one that had an above average reading (Kirkland Lake Gold).

Between the bearish signals from A.I.dvisor, the number of bearish signals from the momentum indicators on the 19 individual stocks, and the poor fundamental indicators—I expect the gold mining group to underperform over the next month.

Gold itself shot up quite a bit and the mining stocks nearly doubled from mid-March through mid-May as the world grappled with the COVID-19 crisis and its impact on the global economy. Now that the global economy is beginning to restart and the domestic economy is starting to show signs of recovery, investors might not find the safety of gold as appealing.

Most of the stocks are showing similar patterns where they peaked in mid-May and have been trending lower since. If the fundamentals were stronger there might be a floor under the stocks to help prop them up, but that doesn't seem to be the case for gold miners in general.

Related Tickers: NUGT
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 07, 2021
4 Tricks Hedge Funds Use to Get Ahead

4 Tricks Hedge Funds Use to Get Ahead

If the stock market were Major League Baseball, hedge funds and institutional investors would be the pros on championship teams while everyday self-directed investors (SDIs) are the benchwarmers in the minors.It’s how they get ahead, and it’s why 90% of SDIs lose money trying to play (invest and trade) in the major leagues. The 4 tricks we discuss below are rooted in one common theme: they all use Artificial Intelligence and algorithms to generate data and ideas.
John Jacques's Avatar
John Jacques
published in Blogs
Mar 22, 2018
A.I. Stock Market Predictions: Head & Shoulders

A.I. Stock Market Predictions: Head & Shoulders

Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I.  Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Jul 10, 2020
3 Stocks to Buy if Coronavirus Second Wave Hits

3 Stocks to Buy if Coronavirus Second Wave Hits

By analyzing market trends from the first wave, you can predict behavior for the second. Technology stocks have performed at historic levels this year, but the market is severely overbought.To compensate for that, look at performance during Q1 and Q2, the height of global Covid shutdowns.
Edward Flores's Avatar
Edward Flores
published in Blogs
Feb 06, 2021
How to Become the Millionaire Next Door

How to Become the Millionaire Next Door

The Golden Gate Bridge is always a fixture of these walks too, one of man's most beautiful creations.  As we were walking, at one point she turned to me and said, "Man, I'll never have a million dollars."" My girlfriend is 27 years old and works as a graphic designer, making about $75,000 a year.
Alla Petriaieva's Avatar
Alla Petriaieva
published in Blogs
Feb 23, 2021
Is Ethereum’s Bomb about to Explode?

Is Ethereum’s Bomb about to Explode?

Ethereum’s software is set for an update in October.Until it is finished, participants in the Ethereum blockchain must determine how to delay the difficulty bomb – code that necessitates a steadily increasing amount of computer power to mine blocks and unlock rewards – that is already in place.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Aug 07, 2018
When Is the Next Recession Coming?

When Is the Next Recession Coming?

However, we also know that economists predicted 22 recessions out of 11 that took place since 1945. Are there real recession signs we should watch for?Indeed, the answer is yes, and here are a few very important ones: The first one is almost obvious and known to everyone – it is the Fed.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 22, 2020
Central banks have been buying $2.4 billion in assets every hour for the past two months

Central banks have been buying $2.4 billion in assets every hour for the past two months

Some $17.8 billion has been poured into  bond markets over the past week, the biggest move in more than three months.Around $3.5 billion has been invested into gold, the second largest on record. 
Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Feb 07, 2021
Mid-January Short Interest Report Shows 8 Stocks with Good Fundamentals and High Short Interest
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 10, 2021
How to Start Trading Penny Stocks

How to Start Trading Penny Stocks

Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 08, 2020
US unemployment rate jumps to 14.7%, the highest in series history

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The U.S. economy’s employment fell by -20.5 million in April. The coronavirus crisis led to unemployment rate soaring to 14.7% in the U.S, the highest rate in the Bureau of Labor Statistics-tracked series history that goes back to 1948. However, the figures were better compared to several economists'/analysts' forecasts of 22 million job losses and 16% unemployment rate.  Another unemployment measure that includes those who have stopped looking for work as well as those holding part-time jobs for economic reasons also touched an all-time high of 22.8%.