Bottom Fishing in Uranium

First of all, Hello, and i hope this finds you well. I have been on the road for the last 2 months, traveling the highlands of South America, mainly hanging out in Medellin, Colombia. Therefor I have neglected my blog and haven’t updated any new content. Instead i am in management mode with my positions i had earlier published about in Gold and Silver:

https://258capital.com/2019/06/01/the-great-australian-break/

https://258capital.com/2019/06/09/silvesqueeze/

Shameless plug above, i know, but calls have been proven to be very successful. I have been pondering on what to write about next, i had allocated capital to Nickel a few months back and that is another call on that is on the move. Though, after Friday’s 9% day lift in the CME Nickel Price on the confirmed Indonesia ban, i felt blogging about something that has already 50% is perhaps chasing. So instead today, I will present a potential ‘Bottom fishing’ opportunity in an asset class dear to my heart instead and one loved by few and hated by many, Uranium.

Without going into the specifics of why you should or should not invest in the sector, every year i have been able to pick a decent seasonal move come Q4 into Q1. And after the S232 capitulation move, i present a very interesting technical set up for the bottom fishers, which is not a easy thing to do.

Seasonality

Let’s start with the seasonal periods of strength and weakness exist in all asset classes. Uranium miners as data below shows usually present a good buying opportunity in the month of September/October and a rise thereafter into Q1. I don’t know what will be the catalyst for the rise there after, Cameco buying, More output cuts, more mines shutting off, rising from oversold conditions, That is all above my pay grade.

URA ETF Seasonal Data shows strength towards year end into early Q1.

20 years of Cameco Data $CCJ Seasonal Trend confirms the same.

image.png

Uranium Participation Corp – physical Uranium show a similar pattern.

image.png

ETFs

Looking at the pure play ETFs, $HURA seems to halted the drop and at the very least stabilized in the short term. I prefer more sideways actions as it builds a nice base.

https://www.tradingview.com/x/7Z3MTWWc/

$GCL is kissing the resistance at the 2016 break out level, basing action is required next.

image.png

All meanwhile the Uranium futures market is hovering at 25.30usd, and consolidating here.

https://www.tradingview.com/x/VMbcslDa/

Charts of Uranium Miners

The reason i titled this ‘Bottom fishing’ will be seen in the charts below. The majority of Uranium miners at the bottom of a long term range. This set up is not for everyone, and most should stick with buying uptrending stocks or with ‘the path of least resistance’. But buying at the bottom of the range also gives you lower downside risk as there is a clear defined stop exit at the support levels.

Let’s start and note, i may miss a few miners in the post, so forgive me, if i do.

$U Uranium Participation Corp showing good relative strength at the trend line.

image.png

$CCJ Cameco.

$UUUU Energy Fuels

$PDN Paladin Energy

Note: RSI has shown strong relative strength versus peers.

https://www.tradingview.com/x/pCGjPfFh/

$NXE NexGen

Friday hammer on weekly.

https://www.tradingview.com/x/4y9EH0ku/

$DNN Denison

https://www.tradingview.com/x/0FPwWlsb/

$DYL Deep Yellow

Trading sub CR price and bottom of the range.

https://www.tradingview.com/x/JPnfSjzF/

$BMN Bannerman

https://www.tradingview.com/x/Iz6Wh1qa/

$PEN Peninsula Energy

https://www.tradingview.com/x/Xk7fe6Pq/

$FSY Forsys Metals

https://www.tradingview.com/x/Yi31PqsV/

$UEC Uranium Energy Corp

https://www.tradingview.com/x/ZvW01ut9/

$UEX

https://www.tradingview.com/x/z3qWH1W4/

$CVV CanAlaska

Tight Range and squeezing

https://www.tradingview.com/x/wkVWj0Gd/

$API Appia Energy

Massive Cup and Handle, my favourite explorer in the micro cap space.

https://www.tradingview.com/x/N062xL9r/

$GXU GoVieX

Range narrowing

https://www.tradingview.com/x/6a3GessG/

These were some examples of all the Uranium miners trending at the lows of the multi year ranges. So buying down here equals low risk in a time most are either out or will wait for higher prices before entering.

Leaders

In all the mayhem and sell down, a few miners have excelled and done extremely well in the face of weakness. These are IMO now the leaders and will go higher first, IF a turn is to occur.

$BOE Boss Energy

https://www.tradingview.com/x/VX51jwAC/

$KAP KazAtomProm Uranium

https://www.tradingview.com/x/yv2tBiet/

$GLO Global Atom

https://www.tradingview.com/x/afWT8WTi/

I may have missed your favourites stock or a A+ Set up but the bottom line here is most of Uranium noise has died down, and the stocks are either threatening to go higher in the case of some like Boss and KAP or at the bottom of a multi year range, which gives us a low risk buying opportunity ahead of what is a USUALLY strength period in Uranium miners.

Thank you for reading


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