Miners versus the 200dma

Using Stockopedia Screens (http://www.stockopedia.co.uk/), I did a search for potentially oversold stocks by looking for those companies with at least £100m market cap, and offered at least a 50% upside in their current price to their 200dma. This can be done by creating the rule: % 200d MA < -33.

Stockopedia returned 17 results, some of which were “weird” (like Sony and Mitsubishi, which aren’t properly listed UK shares). Nearly all of the companies appeared to be miners. This suggests that miners are suffering from very poor sentiment, and may be oversold.

I then added one extra rule: % 50d MA > 0%, and obtained 4 results – all of which were miners. The logic behind the rule is that I am looking for stocks which are well below the 200dma, giving them a lot of upside, but above their 50dma, suggesting that they were at least recovering.

The four companies returned were: EVR, KAZ, MML, NWR. Their charts showed uniformly that the 50dma has bottomed within the last month or so, and are now in uptrend.

*If* the stocks remain in uptrend and make their way back to the 200dma, then they offer significant upside for investors. The key word is, of course, “if”.

Make of that what you will.


About mcturra2000

Computer programmer living in Scotland.
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