Drilling companies are an important part of the precious metals
environment. I am introducing the so-called "DRILL" index. This
index should replicate the price action of a few drilling
companies. Here is the list of these drillers:
Energold Drilling
Major Drilling
Geodrill
Capital Drilling
Orbit Garant
Cabo Drilling
Although Energold is also operating in the energy sector and Major
Drilling's offer is more complex than in the case of a usual
driller, all these companies sell their services to
precious metals miners.
Now, let me show two charts. The first one shows the DRILL index
(comprising the drillers listed above). The second one shows
the DRLL index relative strength against GDX (the broad
precious metals stock market):
From blog: Drill Index foreshadows topping in precious metals miners
Posted by steve101 on 1st of Oct 2016 at 10:03 am
Drilling companies are an important part of the precious metals environment. I am introducing the so-called "DRILL" index. This index should replicate the price action of a few drilling companies. Here is the list of these drillers:
Although Energold is also operating in the energy sector and Major Drilling's offer is more complex than in the case of a usual driller, all these companies sell their services to precious metals miners.
Now, let me show two charts. The first one shows the DRILL index (comprising the drillers listed above). The second one shows the DRLL index relative strength against GDX (the broad precious metals stock market):
The charts show that between the end of 2010 and the end of 2012 DRILL was much weaker than GDX. To remind my readers, in that period the entire precious metals sector was topping so the DRILL index may be considered as a good leading indicator for gold etc.
In other words, when gold and gold related stocks are going up but the shares of drilling companies are going down - be very careful.
Further, since the beginning of 2013 drillers and gold related stocks were generally behaving in the same way.
Last, since the beginning of 2016 DRILL, similarly to the entire precious metals sector, has been in its bull market mode.
On the other hand, since middle June 2016 DRILL has been much stronger than GDX, which, especially in August, entered its severe correction. Well, I will be closely watching the DRILL index in search of a positive correlation to the gold related stocks.