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« CCJ: A readers view | Main | Reader Comments on China and Uranium »

The China Shakeout

News from China has spooked the market with a worldwide sell off taking place.

The sell off was dramatic yesterday with big falls across all exchanges. Gold also took a hit as the sell off was across the board. The broad sell off also took down our uranium stocks. As some of these stocks are gold and uranium plays the effect of gold going down had repercussions for uranium stocks.

So where do we go from here? Well the fundamentals for uranium haven’t really changed in our opinion; the swing towards more nuclear power will continue and does appear to be gathering pace as the figures for new nuclear plants are seemingly in a constant state of upward revision. Has the price of uranium fell out of bed? No! It is still $85.00 per pound. It can be argued that the charts for many of the uranium stocks were banging their heads against the ceiling and due for a correction anyway. That correction has been brought forward by this current reaction to news from China. How long will this sort of carnage go on? We think it could be volatile for the next few days, until Friday, however come next week the news will have been absorbed and the markets should settle into a more normal daily routine. We have no investment cash in the DOW as we see it as overpriced.

When you buy a stock you should have a clear exit strategy in mind if not written down on paper. If your investment meets your objectives then sell it. Conversely if this current volatility is just too bumpy for you and you decide to sell, then try and have a re-entry strategy written down so that you are aware of your own re-entry levels.

We are selling nothing at the moment as we think that this dip will present us with another buying opportunity, today may be a little too soon for you, but if the dust settles then early next week could be a good time to be in an acquisitive mood.

Relax and consider accumulating your favourite uranium stocks while this dip lasts.

28 February 2007

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