Our recently launched Chart Scanner has become an incredibly popular and useful tool for clients as it gives a user the ability to quickly scan through hundreds of charts in order to find the most attractive (or unattractive) patterns. Included with the tool are a number of pre-defined screens that allow users to see stocks that hit 52-week highs or lows in the previous session, experienced “death” or “golden” crosses, as well as charts which we view as having bullish or bearish patterns. Each of these screens can be found using the drop-down box at the top of the page (as illustrated in the image below).
Today we wanted to provide a look at one of the two stocks that showed up on our screen of Death Crosses. That stock is Coeur Mining (CDE). If you aren’t familiar with the terms, a Golden Cross occurs when a stock’s 50-day moving average crosses above its 200-day moving average as both are rising. Conversely, a Death Cross occurs when a stock’s 50-day moving average crosses down below its 200-day moving average as both are falling. While we often note that the technical formations known as Golden and Death Crosses have a spotty record of accuracy, prior Death Crosses for CDE have been pretty bearish. The chart below shows each of the prior four Death Crosses for CDE over the last ten years (2010, 2012, 2015, and last month in June).
Looking at the stock’s returns following each of the prior Death Crosses for CDE, the stock has seen negative returns on both an average and median basis. One week later, the stock was down 3.1% (median: 0.0%) with gains half of the time. One month later, though, the average (-7.77%) and median (-8.36%) returns were a lot worse with only one period of gains. Finally, the average three-month change was a decline of over 17% with losses two out of three times. In the past, we have been quick to point out how bad of a timing indicator Golden and Death Crosses have often been, but in the case of CDE, Death Crosses have usually been followed with losses. As mentioned above, our Chart Scanner tool has become an incredibly popular feature of our Bespoke Premium service. To start using it now, take a two-week free trial to Bespoke Premium today!