CGAU Crosses Critical Technical Indicator

In trading on Tuesday, shares of Centerra Gold Inc (Symbol: CGAU) entered into oversold territory, changing hands as low as $4.638 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

In the case of Centerra Gold Inc, the RSI reading has hit 25.6 — by comparison, the universe of metals and mining stocks covered by Metals Channel currently has an average RSI of 41.6, the RSI of Spot Gold is at 5.4, and the RSI of Spot Silver is presently 12.7. A bullish investor could look at CGAU's 25.6 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.

Looking at a chart of one year performance (below), CGAU's low point in its 52 week range is $4.51 per share, with $7.7099 as the 52 week high point — that compares with a last trade of $4.62. Centerra Gold Inc shares are currently trading off about 9% on the day.

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