Loading ...Uranium
I like this long consolidation/wedge. Seems, area between $1.10-$0.90 may be a good place to get few shares, if someone believe into bullish uranium case. Sweden just decided to go back to nuclear energy. I got few shares and Jan 2025 Calls (strike $2) of DNN between March and April as I marked with circle. If DNN drops back down into this zone, I’m thinking to get little bit more. They will be producing in 2025.
Similar chart for uranium ETF: URA
Could price get into the marked area, just to drop bellow of it? Yes sure, if all markets start dropping big. (and some are expecting this in the Fall)
===================================== EDIT =====================================
I should write this yesterday, but I was low on time. Just from technical analysis view point, this chart is not that bullish. The spikes up last two years are lower and lower, like buyers have less and less buying power. There is also one of the so called ‘rules’: “more often price visits some kind of neck line (support, resistance line) more likely it is, this line gets crossed”.
Why did I post chart then? I’m following a little bit uranium space, since I’m in it LT invested, for example people like Mike Alkin (https://duckduckgo.com/?q=mike+alkin+uranium&ia=web), who did quite a lot of work figuring out real supply and demand and result is, demand is bigger than supply, physical prices are creeping higher, fuel even more… all is pointing that over time, uranium should go higher. Because of this, I decided to post it and I see this wedge in different light. (As biased as I am, I expect this wedge to be broken on the upside and I will be offended if this does not happen) 😉
Now, when will this end of consolidation happen? No one knows of course. It may go another year or two. Price can easy drop bellow neck line and be cut 50% in no time, all is possible.
I also failed to mention, I’m not looking into uranium sector as a trade, but investment. If price does break down bellow neck line, I will not be happy, my 2025 calls (lottery tickets) will probably be wasted, but I will definitely try to get some more shares at lower prices.
P.s. Mike last moth:
Nice Charts Buck
A Star is Born
Definitely worth a shot here
Thanks, making chart is not hard, doing this for some time, but bending them to my will to go where I want, now that is a different story. This chart is not that bullish per se, see my reply to Farmer, I posted it because of fundamentals behind uranium sector. But I’m always too early, so there is that.
I own a few of these DNN being one of them.
Yes, me too, long term, sitting and waiting. This correction, consolidation is going on longer than I would want or expects, but this is what markets like to do, drive you crazy 🙂
I don’t like the looks of that pattern. Note that volume is dropping all through the formation. End result will likely be a decline.
> End result will likely be a decline
Quite possible.
I will elaborate a little bit more, Yesterday I was short with time. First reply about volume dropping, then what I don’t like about chart and why in the world I then posted it anyway 🙂
Volume, as far as I know, should be dropping through consolidation. High volume on a surge up, then low volume on a consolidation or pull back. I always look for this. But in this case, consolidation is so long, it is questionable if this chart really belong into this category.
What I don’t like with this chart is this descending triangle last two years. How it goes, something like this: more often price visits neck line, more likely it is to break it. For this reason, if I would look only at chart, I wouldn’t post it.
The reason I posted chart is, uranium sector as a whole, is becoming more bullish for several reasons, physical price is going up, latter products even more, there is mismatch between supply & demand, Japan is coming back online etc etc… few I follow believes we could soon see an end of consolidation phase.
In this content, I’m looking at this wedge with different eyes. And I forgot to mention, for me regular shares are accumulation then waiting out. If it drops bellow, I will not be happy but I will try to add at better price.
All that being said, appreciate your feedback and if I would looks at chart only, I would come to the same conclusion although for different reasons, as explained above
p.s.
I really should post all this before in original post. It is OK to ‘alter’ it after one day?
The Uranium stocks at least the ones I follow have the same look as a lot of the Silver miners. Might go lower might not too late to sell anyway unless you think they all go into a protracted bear market.
Bulkowski on descending triangles. Sometimes they work sometimes not. Bears can hang their hat on the fact that Uraniums have not gained much traction even with bullish news overall. I think we are just in a protracted trading range now.
https://thepatternsite.com/dt.html
Another problem with the uranium stocks is that they are not cheap. Unlike gold and silver companies. Admittedly the uranium charts are looking good. Plus there are few companies with decent management teams and shareholder friendly share structures. Myself I have hitched my wagon onto Deep Yellow as a long term investment. The best management and share structure. It will take time but this one will be to da moon:
https://stockcharts.com/h-sc/ui?s=DYLLF&id=p10738381654&listNum=43&insp=1
I was going to have some shares in Deep Yellow also, of course, because of John Borshoff, former Paladin. He did it before. But my broker wanted 100$ pay for the trade and I’m cheap skate 🙂 I do have play in Africa though, Global Atomic. So, I have two developers, that should start producing sometimes around 2025 while we may see some 10 years bull market in front of us. Worth a try 🙂 I just need to be patient and sit tight for a few years.