Is The Metals & Mining Sector Rally Overdone?

The precious metals space has shown particular weakness over the past few months.

That said, precious metals prices have been trading sideways for a month (since hitting a near-term low in mid-August), and this has given the life to a bounce/rally in the Metals & Mining Sector (XME).

The question now: Is the bounce over for the Metals & Mining Sector and stocks?

SPDR S&P Metals & Mining ETF (XME)

The SPDR S&P Metals & Mining ETF has been underperforming the SPY since June and is currently overbought based on our Overbought / Oversold Indicator.

Despite a recent rally, Chaikin Money Flow is bearish, and the fund remains below the declining long-term trend line. The Power Bar Ratio for XME is skewed in favor of the bears at eight to one, making it the weakest industry group of the 21 which we track.

Here’s a look at the XME stock chart:

xme metals mining sector stock chart rally over bearish analysis_september 26

Newmont Mining (NEM) – Bearish PGR

Newmont Mining (NEM) has a Bearish Chaikin Power Gauge Rating and has been lagging the SPY since June.

The stock is currently overbought based on our Overbought / Oversold Indicator and Chaikin Money Flow is bearish. NEM is below the falling long-term trend line and price based resistance in the $34 – $36 zone. Below $34, NEM has downside to $22.

Here’s a look at the NEM stock chart:

newmont mining stock chart analysis metals rally over bearish_september 26

 

Twitter:  @DanRusso_CMT

Author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

Sign up for our FREE newsletter
and receive our best trading ideas and research