Uranium shortage can't be ignored
The world faces a long-term scarcity as China and India build new nuclear plants, and major buying opportunities may emerge for shares of some beaten-down producers.
- The weekly uptrend (line b) is currently at $21.75 with additional long-term support, line a, in the $20.85 area
- The recent rally looks like a rebound within the downtrend, suggesting a test, if not a break, of the recent lows is possible before a bottom could be formed
- The weekly relative performance, or RS analysis, has improved but does not yet suggest a bottom is in place. A move in the RS above the May highs would be a positive sign
- There are similar readings from the weekly on-balance volume (OBV), as it is still below its declining weighted moving average (WMA). The daily OBV (not shown) is positive but does not yet show formations consistent with a significant low
- There is initial resistance for CCJ at $31.25 and then the weekly gap at $32.87 to $36.80.
- The $2.52 level corresponds to long-term support going back to 2009, line d, as well as the weekly uptrend, line e. There is additional support at $2.24 and the 2010 highs
- The weekly RS line is trying to hold its longer-term uptrend, line f, as it has turned over the past two weeks
- Weekly OBV has moved well above its flat weighted moving average, which is consistent with a bottom formation. One more pullback to the WMA is possible
- Daily OBV (not shown) does not look as strong as its weekly counterpart
- There is initial resistance at $3.53 with further resistance at $3.89. Longer-term resistance is at $4.30-$4.50
- The recent lows (line a) correspond to the 2010 highs, and additional support is in the $1.30-$1.35 area
- The daily RS analysis is still negative, as it shows a pattern of lower highs and lower lows. On top of the RS, I have also plotted a 21-period weighted moving average that can help identify trends in the RS
- The daily RS dropped below its weighted moving average in February and then violated support, line b, in March. The RS now shows a similar pattern to what occurred in the summer of 2010 (see circles), which suggests the stock may be bottoming out
- Daily OBV is still negative, as there was heavy selling on the drop early in the year. Weekly OBV (not shown) could bottom in the next month
- Key resistance on the weekly chart is at $2.43, and a close above this level would be positive. Additional resistance is in the $2.90-$3.00 area
- There is further support on the weekly chart in the $1.20 area
- The weekly RS analysis has tested its declining weighted moving average but does not yet indicate a bottom has been formed
- The RS completed a bottom formation last summer, moving above its WMA. Several weeks later, the RS started to rise, and URRE subsequently rose from $0.65 to its 2011 high of $3.98
- The weekly OBV has moved back above its weighted moving average, which has now flattened out. This is also a positive sign
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[BRIEFING.COM] It has been a tough go for the stock market today, which has been buffeted by disappointing earnings guidance from some notable companies and geopolitical unease ahead of the weekend.
The EU is reportedly set to announce new sanctions against Russia; meanwhile, Russia's foreign minister has reiterated that the US shares some of the blame for the bloodshed in Ukraine. The takeaway for market participants is that things aren't getting any better on the diplomatic front ... More
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