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« FRONTEER DEVELOPMENT GROUP: Take a profit? | Main | ESO URANIUM CORPORATION: Time to buy? »
Thursday
Oct262006

URAMIUM: at $100.0, but when?

We have predicted before on this website that uranium will hit $100.0. We are not alone in this as a small number of savvy financial letter writers are also putting their reputations on the line with similar thoughts.

Sprott Asset Management, Grandich, James Dines were onto uranium in the very early stages of the uranium bull market. These people are heavyweights in our profession so it really does pay to listen them. Sprott have recently suggested that uranium could go as high as $125.0.

Our stance has been to limit our efforts to no more than a dozen uranium stocks although the Watch List seems to get bigger by the day. Some of the miners we analyse have stories with an awful lot of “ifs and buts” to them and as you know we do prefer something with a little substance to it.

Timing, are yes! Well it’s said to be 90% of any decision and we agree. Uranium is developing its own momentum and that momentum is starting to accelerate. Scan the articles on this site as you see it is littered with “and uranium goes up again” To our way of thinking this acceleration will have an expediential effect on price rises. If you go to market and the price is $46.0 then a few weeks later it is $50.0, and last week it cost you $56.0, you have got to be concerned.

Most of the miner’s wont hedge so you cant lock them in for future deliveries. Even Cameco has contacts whereby it can defer deliveries. So, the current water problems that they are experiencing at Cigar Lake could actually work in their favour. After all, why sell uranium now when you can probably sell it in 3 months time at a much higher price?

Back to timing. This acceleration will cause the uranium users to try and stockpile some uranium and protect themselves from future prices rises. This strategy may help to ease the pain but with consumption outstripping supply that pain is most certainly going to come.

Our indications are that we could see uranium at $75 by the end of the year, with a spike to $100.0 by mid summer 2007. There we go heads on the block. It may give you a chuckle but please make sure that you have a few uranium stocks in your portfolio because they are going to fly. If you don’t like our selection that’s fine, follow your trusted analyst and buy a few of their recommended stocks. Be careful though as this is a thin market which could be subject to “Pump and Dump” scams. A number of uranium stocks have risen sharply recently some with massive increases in volume over just a few days? What happens when this type of buying activity subsides? Damn right, the stocks could well retreat just as quickly. When a stock spikes up try to find out what is behind the move, a 50% increase would worry me when the volume is uncharacteristically high. Larramide for instance moved up 9.13% yesterday, however the volume was 383,000, which is fairly close to its norm. On the other hand Uranium One has traded 20 million shares in 3 days, way above its norm, so don’t buy it now, wait for the euphoria to settle down and revisit it some time in the future.

We could be wrong about some of these dramatic moves and the market could be telling us that this really is the start of something big!

26 October 2006

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Reader Comments (4)

You know, I'm old news too. But October 2006 is too old for a buy recommendation.

March 31, 2008 | Unregistered CommenterIndiana John

take a look @ uranium energy (uec) on amer.stk. exchange

March 31, 2008 | Unregistered Commenterbilly blume

Why are you sending last years news letter?Oct 2007.Uranium to hit 100$,how a prediction for 2008/9.
Jeff.

March 31, 2008 | Unregistered Commenterjeff east

Hi,

Our readers asked us to group together articles of a similar nature so that they could see what we had written previously, it saves them time in that they do not have to search all through the site to find related articles. It works well when we write about a company as all those previous articles for the same company are grouped together.

You can always ignore the associated articles and just read the main article.
Hope this explanation helps.

Best wishes,

Bob

March 31, 2008 | Unregistered CommenterUranium Stocks

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