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] The stock market welcomed the new trading week with a mixed session that saw relative strength among large-cap stocks, while high-beta names underperformed. The Dow Jones Industrial Average (+0.3%) and S&P 500 (-0.1%) finished near their flat lines, while the Nasdaq Composite and Russell 2000 both lost 1.1%.
Equities began the day on a cautious note amid continued concerns regarding the strength of the global economy. Over the weekend, China reported its first decline ... More
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