Diamond stocks were bad performers in recent years, even though many metals did quite well. The tide may be turning now for diamond stocks. 8 top diamond stocks outlined in this article show a great chart setup for 2019, 2020 and beyond. They will be added to our shortlist of potential candidates of TOP investing opportunities.
Mining diamond comes with lots of challenges. There is a long and exhausting path before it shines as an end consumer product.
Much more about diamond mining in this article. It highlights the diversity and complexity of diamond mining. This is a quote that illustrates what we are saying: “Even with all our technological advances and engineering tools, diamond mining still incorporates a certain level of art and science combined. So, let us also take a look some methods in which rough diamonds are extracted from the ground.”
Moreover, and certainly very interesting to read, there are many facts about diamonds which are not well known.
For instance, diamonds were formed billions of years ago through a combination of tremendous pressure and temperatures of 1652–2372 degrees Fahrenheit at depths between 90 and 120 miles beneath Earth’s surface.
Diamonds were discovered in South America as early as 1725. The discovery occurred in Minas Gerais, Brazil, just as the production in India was dwindling.
Even though the U.S. produces almost no diamonds for commercial consumption, America buys more than 40 percent of the world’s gem quality diamonds – making it the world’s largest diamond market.
Alert on Top Diamond Stocks for the medium to long term
As pointed out by Bloomberg diamond stocks were crashing one and two years ago.
However, as shown in this article, diamond stocks look to be bottoming at current price levels.
Note that the sector is not an easy read. Diamond stocks have many influences, first and foremost the demand combined with the price of the U.S. dollar.
InvestingHaven’s research team flashes an alert on the diamond mining sector. As explained in this article we see a potential of turnaround in the sector from bearish to bullish. The bullish outlook is for the medium to long term.
We expect diamond stocks to outperform in the next 2 to 3 years. The reasons why we believe so are outlined in this article.
The following list of stocks spread across few countries would cast some light on the better futures of diamond miners.
8 Top Diamond Stocks And Their Chart Setup for 2019, 2020 and beyond
Let’s start with a sector evaluation.
The list of diamond mines may be long. That’s why we focus on the top diamond stocks. We made a selection of the top 8 diamond stocks. They reflect the state of the industry. We believe it’s sufficient to analyze the top diamond stocks as opposed to all diamond stocks.
The diamond sector view: PICK ETF
The iShares MSCI Global Metals & Mining Producers ETF (PICK) seeks to track the investment results of an index composed of global equities of companies primarily engaged in mining, extraction or production of diversified metals, excluding gold and silver.
The monthly chart of PICK show that its price found supported twice in the 25.5 – 28 area. If the right shoulder scenario does not play out and price moves higher than the ‘head’ it would suggest a continuation of the uptrend. It would ultimately send price higher to challenge 55.3
Top diamond stock Rio Tinto
Rio Tinto (ASX: RIO) is listed in America, Australia, Switzerland, UK and Germany. We take a look at the chart from Australia.
The monthly line chart of Rio Tinto shows a huge consolidation of cup shape since the 2008 top, price looks set to challenge ~ 118 price zone again.
This is a very enticing chart setup, a typical rounding bull flag formation in the context of a long term rising channel. This suggests a bullish outcome provided the rounding formation is not broken to the downside!
Top diamond stock Lucapa Diamond Company Ltd
Lucapa Diamond Company Ltd (ASX:LOM) is an emerging global diamond group with high-quality mines in Angola and Lesotho, along with exploration projects in Angola, Australia and Botswana.
Lucapa Diamond monthly chart illustrates a gigantic consolidation triangle where price is near the tip of triangle and a big decision has to be made soon. Given the potential bullish sentiment with massive support region, we prefer to take the bullish stance and subsequently breaking of above the downtrend line unless, price breaks below the support zone.
Top diamond stock Sarine Technologies
Sarine Technologies (SGX: U77) is the worldwide leader in the development and manufacturing of advanced systems for diamond technologies and gemstone production.
The monthly chart of U77 looked ugly after its 2014 top. It is still officially in downtrend with no sign of reversal. But price has approached the channel support and major horizontal support. These dual support areas could play an important role on how it develops in near future.
Top diamond stock Alrosa PJSC (MCX: Alrosa)
A state-owned corporation listed in Moscow stock exchange, one of the largest diamond mining company that specializes in exploration, mining, manufacture, and sale of diamonds. The company leads the world in diamond mining by volume. Mining takes place in Western Yakutia, the Arkhangelsk region, and Africa
Monthly chart of Alrosa shows an ascending triangle pattern. Prices might challenge the resistance zone again for the fourth time. Breaking above will mean mid-long term bullish outlook which is in line with what we expect.
Our stance will need to a review if and when the price breaks below the uptrend line. It would certainly not be a bullish evolution.
Top diamond stock Five Star Diamonds
Five Star Diamonds – STAR (CVE) formerly Turquoise Capital Corp., is a Brazilian diamond producer. It is focused on the acquisition and development of advanced stage projects in Brazil. The company owns 23 kimberlite projects in the country, comprising 72 fully-owned exploration licenses and covering a total area of 123,667ha.
Its flagship project is Catalão, located in Goiás state, which recently completed a pilot mining and processing program. The firm is currently conducting bulk sampling activities at the Jaibaras project, in Para state.
Five Star Diamonds also owns four diamond processing plants in Brazil. Its headquarters are located in Rio de Janeiro.
The stock price of this top diamond stock has been volatile after hitting major support zone. For confirmation, investors might want to wait for price to break downtrend line convincingly before considering position.
Top diamond stock Lucara Diamond Corp
Lucara Diamond Corp. (TSX: LUC) is a diamond exploration and mining company, operating in southern Africa but established in Canada.
Since the price plunged from its major top in July 2007 from 8 dollar to 0.21 cents it was able to get back to 4 dollar. Afer this it retraced to 1.70. Visibly, 1.40 is an important price zone where horizontal and uptrendline support coincide.
Breaking down means more consolidation would be required. If price gradually moves up it would confirm our potentially bullish stance.
Top diamond stock Petra Diamonds Ltd
Petra Diamonds Ltd (LON: PDL) is a diamond mining group headquartered in Jersey. It has a diversified portfolio, with interests in eight producing mines in South Africa and Tanzania and an exploration programme in Botswana
The monthly chart of Petra Diamonds keeps making lower lows. It doesn’t look good at all but price came to temporary halt on what seems to be a major support zone.
We expect some volatility before price moves up. We do not rule out a temporary fake down before going up too.
Top diamond stock Mountain Province Diamond
Mountain Province Diamond (TSE: MPDV) Mountain Province Diamonds Inc. is major partner with De Beers in the Gahcho Kue Diamond Mine Project in the Northwest Territories. Gahcho Kué is the world’s largest and richest new diamond mine, with an estimated reserve of 80 million carats
The monthly chart of MPDV looks really bad with no sign of bottom (yet). Presumably, its price will reverse when market sentiment hits rock bottom.
We are not saying price will reverse for sure, but given that price has hit the upward channel lower support means there is a potential support coming soon.
There are other huge diamond mining companies which we couldn’t find the chart such as Dominion Diamond Corporation (DDC) from Toronto and etc.
8 Top Diamond Stocks: Conclusions
Judging from the above 8 diamond stocks stocks from various countries only Rio Tinto stands out amongst of them with a strong uptrend.
We are fully aware of the currency effect having influenced diamond prices. As a general rule of thumb we deem diamonds (part of the mining business) to be U.S. dollar sensitive. The lower the USD falls the better for diamond mining companies.
InvestingHaven’s team sees a potential bottoming formation in diamond stocks. However, we want to see a major fall in the USD in next few months. Should the USD continue to rise it will not be favourable for the diamond mining business.
Moreover, the current bottoming formation looks very enticing for the long term. We must see confirmations of these major bottoms first, before going all in on the diamond stock sector. It is an absolutely mandatory pre-requisite. Anticipating a bottom is not a sign of investing wisdom.
We will followup if and when the diamond stock sector shows signs of turning bullish, throughout 2019 and 2020
This article only serves an educational report. We do not intend readers to buy or sell stocks because of our writing(s).