NEW YORK (TheStreet) -- The bubble in Comex gold began from its 200-week simple moving average at $651.3 in October 2008. The bubble inflated to as high as $1923.7 the Troy ounce in September 2011. Breaking below the 200-week SMA at $1435.3 between mid-April 2013 and mid-May 2013 was the final signal that the gold bubble had popped.
Here's the weekly chart for Comex gold futures.
Courtesy of MetaStock Xenith
The weekly chart for gold is negative, with its five-week modified moving average at $1300.9 and its 200-week SMA peaking at $1498.9.
Courtesy of MetaStock Xenith
The post-bubble low for gold has been $1179.4, set in June 2013. The low on the daily graph above is $1181.4, set on December 31, 2013. Gold moved above its 200-day SMA at $1309.5 on Feb. 14, and the 2014 high so far is $1392.6 on March 17.
Gold has been trading back and forth around its 200-day SMA now at $1285.4 since Feb. 14. A quarterly value level is $1234.6, with a monthly pivot at $1304.3 and semiannual risky level at $1613.0.
Let's measure the performance of six gold mining stocks vs. the performance of gold. Two "crunching the numbers" tables follow.
Barrick Gold (ABX) ($18.45) is up 4.7% year to date and led the early-2014 gold rally. The stock traded as low as $15.26 on Dec. 4, crossed above its 200-day SMA at $18.30 on Jan. 17 and traded as high as $21.45 on Feb. 25 before the 2014 peak in gold. Barrick traded as low as $15.47 on May 28 before the low in gold. The stock is above its 200-day at $18.12 with gold below.
The weekly chart is neutral, with Barrick just below its five-week MMA at $18.46. In common with gold, the stock is well below its 200-week SMA at $34.38. A semiannual value level is $17.82 with a monthly risky level at $19.32.
Up next: Anglogold and Yamana Gold.
AngloGold (AU) ($17.03) is up a solid 45% year to date. The stock traded as low as $11.14 on Dec. 19, crossed above its 200-day SMA at $14.37 on Feb. 4 and traded as high as $19.53 on March 14. AngloGold traded as low as $15.32 on May 29, staying above its 200-day SMA, which is now at $16.06.
The weekly chart is negative, with its five-week MMA at $17.37. It is well below its 200-week SMA at $30.88. A semiannual value level is $14.45, with monthly and annual risky levels at $18.68 and $19.23, respectively.
Yamana Gold (AUY) ($8.38) has slipped 2.8% year to date. The stock traded as low as $8.31 on Dec. 3, crossed above its 200-day SMA at $10.07 on Feb. 11 and traded as high as $10.70 on March 14. Yamana did not stay above its 200-day for very long, falling back below it on March 19. The stock traded to a multiyear intraday low at $7.02 on May 29 before rebounding to its 200-day SMA at $8.71.
The weekly chart shifts to negative given a close on Friday below its five-week MMA at $8.42, and is well below its 200-week SMA at $12.94. Monthly and quarterly value levels are $7.95 and $7.89, respectively, with semiannual risky levels at $12.42 and $12.95.
Goldcorp (GG) ($27.49) is up a solid 27% year to date. The stock traded as low as $20.54 on Dec. 19, crossed above its 200-day SMA at $25.74 on Feb. 10 and traded as high as $29.27 on March 14. Goldcorp crossed back below its 200-week SMA at $25.52 on March 24 and traded as low as $22.68 on June 3. The stock has been above its 200-day SMA at $25.13 since June 17 and out-performed gold trading to a new 2014 high at $29.65 on August 14.
The weekly chart shifts to negative given a close on Friday below its five-week MMA at $27.58. The stock is well below its 200-week SMA at $37.43. Semiannual and quarterly value levels are $24.55 and $20.73, respectively, with a monthly pivot at $27.61 and semiannual and annual risky levels at $32.80 and $43.72, respectively.
Newmont Mining (NEM) ($26.61) is up 16% year to date. The stock traded as low as $20.79 on Feb. 6, lagging the price of gold. The stock closed above its 200-day SMA at $26.19 for one day only on April 25. Newmont traded as low as $22.22 on June 3, and has been above its 200-day SMA at $24.45 since July 9, trading to its 2014 high at $27.39 on August 13, outperforming gold.
The weekly chart is positive but overbought, with its five-week MMA at $25.78. The stock is well below its 200-week SMA at $44.35. Monthly and semiannual value levels are $22.46 and $21.47, respectively, with an annual risky level at $34.34.
Royal Gold (RGLD) ($75.79) is up a solid 65% year to date. The stock traded as low as $42.56 on Dec. 3 and has been above its 200-day SMA at $50.98 since Jan. 13, leading the price of gold. The 200-day SMA is now at $62.85, with the stock setting its 2014 high at $82.84 on August 13.
The weekly chart shifts to negative given a close on Friday below its five-week MMA at $75.99. The stock is above its 200-week SMA at $64.71. A semiannual value level is $72.24, with a semiannual pivot at $75.11 and annual and monthly risky levels at $78.81 and $83.36, respectively.
Up next: charts on how to trade these stocks.
Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics
This table provides the technical status for the stocks profiled in today's report.
There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.
The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.
Interpretations: (stocks below a moving average listed in Red are below that moving average)
Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.
A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.
A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.
A stock with a neutral technical rating has a profile that is not positive or negative.
The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three- to five-year horizon.
The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.
The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.
The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six- to 12-month horizon.
Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy and Sell
This table shows the date the company reported quarterly results, the earnings per share and the beat or miss.
The table then presents the levels at which to buy on weakness and where to sell on strength.
Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.
Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
TheStreet Ratings team rates ROYAL GOLD INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ROYAL GOLD INC (RGLD) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- RGLD's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 27.73, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for ROYAL GOLD INC is currently very high, coming in at 93.66%. Regardless of RGLD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RGLD's net profit margin of 34.87% significantly outperformed against the industry.
- Powered by its strong earnings growth of 210.00% and other important driving factors, this stock has surged by 38.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- ROYAL GOLD INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ROYAL GOLD INC reported lower earnings of $1.09 versus $1.60 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $1.09).
- RGLD, with its decline in revenue, underperformed when compared the industry average of 3.2%. Since the same quarter one year prior, revenues fell by 22.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: RGLD Ratings Report