Chart courtesy of TradeTech.

Taking a quick look at the above chart we can see that Cameco Corporation (CCJ) has put in a terrific run recently as the uranium sector attracts a little more in the way of investor interest.

The technical indicators suggest that this stock is now overbought especially the RSI which stands at 82.23 and it appears to us to be ready to take a breather and retrace a few steps back towards the $20.00 level.

In anticipation of a pull back we are looking at purchasing the June 2009 PUTS at a strike price possibly just out of the money. We will watch the market opening on Monday and then take it from there. This is a hit and run trade so we don’t expect to hold this position for very long. If and when a reasonable profit appears we will close the trade.

We thought that it might help if we gave you a ‘heads up’ as to the way we are thinking and how we intend to try and make a few bucks from this situation. Your comments are of course most welcome.

Cameco Corporation has a market capitalization of $9.60 billion, a 52 week high of C$44.00 and a 52 week low of C$11.78, average turnover is was 2.77 million shares and trades as CCO on the Toronto Stock Exchange and as CCJ on the New York Stock Exchange.

Have a good one.

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