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« Uranium Stocks still in hibernation! | Main | Uranium-Stocks: Portfolio Update 01 December 2008 »
Wednesday
Dec032008

Uranium Participation: Bucking The Sector Trend

Uranium Participation: Bucking The Sector Trend


Whilst the majority of uranium stocks, and in fact most stocks across the board, appear to be fizzling away in recent month, Uranium Participation appears to be challenging with this recent rally, perhaps indicating a slight change in sentiment towards the sector.

Uranium Participation has rallied from below $5 to above $7 in just two months, a gain of over 40%. Meanwhile other uranium stocks, such as those in mining and exploration, have been making lower lows. The Relative Strength Index (RSI) is also moving higher, which is a sign of growing strength in the stock.

Perhaps there is some hope in this rally, as U.TO gets pushed higher by the uranium spot price rising to $55/lb during the last two months. This could be a sign that things are getting better, or at least are taking a pause from getting worse, in the uranium sector, and that we could be moving closer to a turnaround.

For those not familiar with this stock, Uranium Participation is a fund which holds physical uranium, thereby by purchasing shares in the company, one gains exposure to fluctuations in the uranium price.

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Reader Comments (3)

There is also a strong correlation to the Canadian dollar (loonie) exchange rate.

It surprises me, I know that shares are priced from U.TO but the physical value of the Uranium would be independent of currency I would think.

It you can elaborate, it would be informative.

December 4, 2008 | Unregistered CommenterJake Miles

The spot price of Uranium is quoted in US Dollars/lb. All other things being equal I would expect this price to change in relation to the stregth of the Dollar.

Now, given all the fiscal stimulus going on I would expect that by 2010 we would be starting to see some Inflationary forces coming into play. This is likely to start pushing up the price of Gold and perhaps Uranium ("all other things being equal"...!)

If the credit crunch causes the Uranium Producers to scale back production and the nuclear industry demand remains constant or rises then the sheer volume of extra liquidity should cause prices to rise -and stocks with it- or at least those that have survived.

Nick

December 5, 2008 | Unregistered CommenterNick

Spot on!

December 6, 2008 | Unregistered CommenterUranium Stocks

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