Posted 20 September 2006 - 07:59 AM
Lots of the exploration companies and junior producers have gotten their share prices whacked during this general resource and commodity price decline. I see that big producer Cameco is only slightly going down/sideways and Denison Mines went down hard into June but has come right back up. Things may have gotten a bit overblown last year and into April/May of 2006 for the sector as a whole but it's hard for me to imagine the divergence -- rapidly increasing commodity price/falling or static share prices -- not going away in the end.
Had gold or oil gone up as uranium has, it's inconceivable to me that the related stocks would have been as weak as is the case for uranium issues. Maybe the market has one heck of a trick up its sleeve, but for the long haul I think this is leading to a great buying opportunity. Short-term, that was some monster volume yesterday for Denison, on a down day, though.
For a good while now I've wondered if RTP is making a double zig-zag move down. It's conforming well to an idealized wave structure, and another leg down equal in length to the May-June decline would put us below $150. A Fibonacci .618 multiple of red "A" targets the $173 area, and we're almost there.
Support at $140 - $160 shows on the weekly chart.
Posted 20 September 2006 - 02:57 PM
Whoa! I confess to some bottom-picking right here before the close. $1.85
Posted 20 September 2006 - 03:08 PM
Edited by hiker, 20 September 2006 - 03:09 PM.
Posted 21 September 2006 - 02:58 PM
You were right -- that was a rash and foolish thing to do on my part. Shooting from the hip, as it were.
Would you believe there was an explosion this morning at a part of the plant where my office is, and that the wires for internet access were cut?
I just got back online, and expected to see URRE at $1 or 25 cents or some darn thing. Got lucky, low = 1.91, last at $2.49. 35% profit in one day.
Good grief, should I take it? I'm tempted not to -- URRE is an actual producer of uranium.
Sure, it's a pleasant surprise to see it up today, but you were right about more downside being easily possible. As I thought about it last night I cursed myself for a fool a dozen times over. Sheesh.
Let me say again that you made a fantastic[size=3] call in early May about the McClellan Summation Index -- that you were pretty much out of longs. Man, I wish I could go back in time 4 or 5 months.
Posted 21 September 2006 - 04:01 PM
Edited by hiker, 21 September 2006 - 04:05 PM.
Posted 21 September 2006 - 08:29 PM
Edited by hiker, 21 September 2006 - 08:30 PM.
Posted 22 September 2006 - 12:28 PM
Edited by hiker, 22 September 2006 - 12:30 PM.
Posted 29 September 2006 - 09:26 AM
I sold because it sure looks like five waves up on the chart, and momentum is flagging. The high on Wednesday was 3.20 and even a pretty wimpy fifth wave ought to get as high as the top of the third wave. Thus far today it hasn't done much more than that -- the high has been $3.25 and last I looked it was trading at 3.14.
A nice 73% profit in 7 trading days. And a nice symmetricality to it, buying 5 cents off the low and selling 5 cents from the high (thus far). It still was a rash thing to do; not my pattern at all (if I can help it).
I do want to own uranium stocks, especially companies that actually produce uranium, and maybe URRE will make a nice ABC decline or something so it can be bought back a lot lower. That $2.70 or $2.60 area looks interesting, eh? I'd rather see a much bigger decline, maybe a fat Fibonacci 50% or 62% of the rally, something like that.
Posted 15 October 2006 - 10:19 PM
Ha! Got the 62% retracement of the whole rally from the $1.80 low. This thing is thinly traded and relatively untrustworthy as such for charting concerns, but it's been too good to be true thus far. Long again....
Posted 27 October 2006 - 06:11 AM
TORONTO (ResourceInvestor.com) -- The junior market is rarely efficient, which is precisely why there are many mispriced securities out there that represent bargains, or overvalued dogs waiting to crash. It is the lack of efficiency in Canadian junior markets that allows those who know what they are doing and have a nose for value, to make multi-baggers in 12-24 month time frames. This gradually occurs as others see what you saw, and which, by the time Joe Six-Pack gets involved, has probably become glaring and obvious.
A couple of days ago when Cameco [NYSE:CCJ; TSX:CCO] announced delays at Cigar Lake, it was remarkable to see the small number of better known, larger uranium players listed in Canada instantly jumped 10% as Cameco was dropping by 10%. In no particular order, International Uranium Corp. [TSX:IUC], UEX Corp. [TSX:UEX], Paladin [TSX:PDN], SXR Uranium One [TSX:SXR], Ur-Energy [TSX:your] and UrAsia Energy [TSXv:UUU] all did very nicely.
The gains didn’t trickle down to the smaller uranium companies, most of which are explorers, which is probably fair enough.
Will the Gains Hold?
The fact is that the price of uranium goes up almost every week, and the companies that saw their share prices rise won’t likely be making large adjustments to their production outlooks based on Cameco’s misfortune.
Nevertheless, Cigar Lake was slated to produce a very meaningful double-digit share of global uranium production, something which will probably still happen, just with some delay.
It is telling that the Uranium Participation Fund [TSX:U], which essentially tracks the price of uranium, jumped 20% in two days on the back of Cameco’s news. This may indicate that the next uranium price quote which is published, will see yellowcake in the mid $60 range per pound.
Shares in the aforementioned so-called near-term producers (more likely for some than others) have continued to rally, while Cameco has not recovered.
If Cameco were to bite on just one of these producers, maybe Paladin or UrAsia, the whole sector would go nuts.
As it is, if gains continue to hold, then the uranium market even for the juniors may well be on its way back again, and it may be time for investors to re-load some of their favourite names, which are not as core as the near-term production bunch.
Indeed, as fellow RI correspondent Michael DesLauriers noted in August, “There is little doubt that the entire universe of uranium stories will have another run, good and bad alike, if only as a result of price action in the metal itself, and a concomitant swelling in speculation. The important thing to consider is that, like other areas within the resource sector, there is such a thing as the best of breed. In the case of uranium plays the top of the heap are those companies which are near production, or already in production.”
And just two weeks ago, RI stated: “It is RI’s firm conviction that uranium names will have their turn again soon, as investors rotate back into the space, and that when that time comes, battered quality names will receive the majority of lift.”
That has now happened, or is beginning to happen. Next to go will be quality junior names with high-impact potential and first-class sponsorship.
There will likely be more action to come in the near-production names before the juniors start to move. When they do however, because the majority are at or near their 52-week lows, some very good money will be made. This calls for a watching brief.