Chart courtesy of StockCharts.com

Just a quick note to update you on the progress of June 09 $25.00 PUTs that we purchased for $1.40 per contract (CCJRE) on Cameco Corporation (CCJ) recently.

Our assessment was that Cameco had ran ahead of itself and that a pull back is now imminent.

The trade started well when it closed up 40% the following day, however, Cameco’s stock price has since recovered resulting in the value of the PUTs dropping back to trade at $0.15 before climbing slightly to close on Friday at $0.45. These options expire on 20th June 2009 so we rapidly running out of time for the trade to work in our favour.

CCJ has recently turned down over the last two days and the technical indicators are heading south suggesting that the current rally could be over, so its fingers crossed that it falls further in the next few days and presents us with an opportunity to exit this trade.

Options are extremely volatile so please limit the amount of cash that you place into this sort of trade as you could lose it all if it goes wrong.

Cameco Corporation has a market capitalization of $10.13 billion, a 52 week high of C$43.60 and a 52 week low of C$11.78, average turnover is was 3.18 million shares and trades and closed yesterday at $25.82. Cameco 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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