Sandstorm Gold Ltd.

Sandstorm Gold Ltd. (NYSE: SAND) is a Canada-based gold-focused streaming and royalty company. The Company offers financing solutions to gold mining companies. The Company holds a portfolio of over approximately 250 royalties, of which 39 of the underlying mines are producing.

Underlying Commodities Analysis

The price of gold surpassed USD 1,920 per ounce, showing a recovery from its three-month low. This increase can be attributed to global economic uncertainties and political instability in Russia, which prompted some investors to seek the safe-haven qualities of the metal. Over the weekend, the paramilitary group Wagner made a move towards Moscow, indicating a potential insurrection, although it quickly retreated after reaching an agreement with the government.

Additionally, the US Federal Reserve indicated its intention to implement further rate increases within the year to address inflation concerns. Furthermore, major central banks in Europe unexpectedly raised interest rates by a larger margin. These actions raised concerns that higher interest rates might negatively impact the global economy, leading to a cautious approach among investors in various financial markets.

Technical Observation (on the daily chart)

With a past year correction of almost 20.27%, the price has been in a persistent downward trend over the last year, with the medium-term negative trend as well evident by a correction of 6.94% in previous six months. The price is taking decent support after a healthy correction at levels of USD 4.50-USD 5.00, with the current price consolidation in the price range of USD 5.00 to USD 5.50, with an expected breakout on the upside. Also, the momentum indicator RSI (14 period) displays an increasing value of 38.77, taking support from levels of 30, indicating some buying momentum in the stock price. Price is also below to the 21-day SMA and 50-day SMA trend-following indicators, which can serve as dynamic short-term resistances.

As per the above-mentioned price action, underlying commodities analysis, and technical indicators analysis, a ‘Buy’ rating has been given to Sandstorm Gold Ltd. at the current price of USD 4.97 as of June 26, 2023, at 06:55 am PDT.

 Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is June 26, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

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