Greg Schnell

Greg Schnell

Chief Technical Analyst, Osprey Strategic

The Canadian mining stocks appear ready to roll over.

It is quite surprising that they've not been able to rally given the recent weakness in the US Dollar. With the move down in the US dollar, we would've expected the value of the metals and the associated miners to move up but that just isn't happening.  Check out this chart to see what I mean:

$SPTMN 20120827

This hardly looks like a bull run off the June lows.  While the weekly bars have moved a little higher, they have not moved up enough to turn the Elder Impulse System from blue to green, nor has the Full Stochastic line moved up.  The MACD and Ultimate Oscillatior are slowly improving, but the RSI and relative strength lines at the top of the chart have gone sideways.  If Canadian miners were really rallying, the weekly technical signals would be much more positive.

For all those reasons, caution appears warranted.  A case can even be made that the 750 level makes a nice head/shoulders neckline on a long term chart!

Greg Schnell, CMT

Greg Schnell
About the author: , CMT, MFTA is Chief Technical Analyst at Osprey Strategic specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More