During the recent trading sessions stock of Hecla Mining Company (NYSE:HL) was gathering the crowd in the stock market. Many experts agree that the truth about a stock is best reflected in the way it moves on the chart. For this stock, the chart has a lot to say about future performance.
How has the stock performed recently?
Hecla Mining Company (NYSE:HL) has been trading in a bearish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of HL has decreased -6.56%. Shares are now down -28.61% over the past year, underperforming the broad market by -313.51% and outperformed a peer group of similar companies by 264%. After the latest session, which saw the stock close at a price of $4.84, HL sits -36.65% below its 52-week high.
Of course, these surface-level price movements don’t tell us much about the direction that HL may be headed in the future. To do this, analysts often study the speed and magnitude of a stock’s price movements with what are known as momentum indicators. The logic is that as a stock’s momentum slows, it may be nearing key support or resistance levels and possibly the end of a current trend. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for HL is 40.40%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 8.36%, tells a different story, and suggests that HL currently trades in oversold territory.
What do the trading volumes reveal?
Volume patterns are useful for gauging the level of conviction behind price changes, and can be used to make predictions about future price movements. A sudden increase in a stock’s activity can be a sign that investors are trading in anticipation of a catalyst, or that investors feel very strongly in one way or the other about the future direction of a stock. Hecla Mining Company (HL) average trading volume of 4,087,610 during the past month is 49.74% below its average volume over the past year, indicating that investors have been less active than usual in the stock in recent times.
What do the analysts think?
HL is currently undervalued by -22.93% relative to the average 1-year price target of $6.28 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.90, which implies that analysts are generally neutral in their outlook for HL over the next year.
How risky is the stock?
When predicting the future performance for a stock, it’s also important to take into account risk. To do this, analysts often use a stock’s beta, which measures the stock’s volatility relative to the overall market.
Hecla Mining Company (NYSE:HL) has a beta of 0.41, compared to a beta of 1 for the market, which implies that the stock’s price movements are less extreme than the market as a whole. HL therefore has an below average level of market risk. During the past couple of weeks, HL average daily volatility was 44.46%, which is -5.39 percentage points higher than the average volatility over the past 100 days.