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« Cameco Corporation looks ripe for a short | Main | Laramide Resources Limited Up 32.77% Today »
Wednesday
Apr292009

Uranium Stocks Attracting More Interest

Uranium Chart 30 apr 09.JPG



Chart courtesy of u308.biz.

What a day today has been for uranium stocks as some put on tremendous gains, such as Uranium Resources Incorporated (URRE) up 50%, Crosshair Exploration and Mining Corporation (CXX) up 41.67%, Denison Mines Corporation (DNN) up 22% and Laramide up 11.11% to mention just a few.

Also take a note of the increased volume of shares now being traded on these stocks, URRE has an average daily turnover of 393,000 and yesterday that number hit 4.56 million, so investor interest is returning with a vengeance.

Picking entry points is always difficult but it does appear to us that this tiny sector is trying to get up off the floor having been slaughtered during the recent broader market sell off attributed to de-leveraging. The rally in the main markets may continue a little longer however we think it is nothing more than a bear rally and an opportunity to get out of mainstream stocks at slightly higher prices. The banking sector remains treacherous as the latest fad of stress testing is implemented with the results eagerly awaited. When this rally peters out and stocks once again head south it may well take uraniums with it. The month of May is upon us so we will see just how resilient this sector is. The spot price of uranium has moved up slightly and would appear to be the indicator that is being closely watched and acted upon. The longer term price for uranium remains steady at $70/lb which is the 'good news' in our humble opinion.

Uranium Long term price from TradeTech 30 Apr 09.JPG
Chart courtesy of TradeTech.

Have a good one.


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Reader Comments (5)

While the uptick in uranium stock prices are welcome, I cannot help but thinking that it's a rally that is going to be reversed very soon.

Markets will drop back quite sharply (IMO). For a sustained rise their needs to be a framework where:

1)The toxic assets are dealt with and Banks are forced to reveal just how bad their assets are.The longer this issue is left unaddressed the longer it will take for markets to recover- not by some pathetic stress tests!

2)Corporate earnings are deemed to have troughed- these should plunge for at least the next 2-3 quarters.

3)Banks start lending again,and Libor premiums have come down markedly- only very tentative signs of improvement here.

4)Residential and commercial real estate has hit rock bottom- there is still pain here I am afraid,perhaps 18m-2yrs............what with unemployment still soaring and people tightening their purses.

SO,basically if you are lucky enough to have invested in some of these Laramide's,Denison's,etc which have performed up 50-100% of late............I'd take those profits NOW.
And of course dip back in and repurchase again once the DOW has tumbled back to around 5750-6200.

Of course you may see different,but I think this is sound advice.

April 30, 2009 | Unregistered Commenterthe pilgarlic

5)And of course,a increase oil up to $70+ wouldn't go amiss!

April 30, 2009 | Unregistered Commenterthe pilgarlic

this short video is worth a watch from cnbc. the guy reckons that uranium companies got hit badly because the hedge funds has to do a forced liquidation to meet their redemptions.

http://www.cnbc.com/id/15840232/?video=1107953445&play=1

April 30, 2009 | Unregistered Commenterp

It is interesting that ASX uranium stocks were the first to fire up in this rally, good to hear your TSX is catching up. For years downunder resource juniors looked at a TSX listing as some sort of Holy Grail but I am not sure what the consensus about that is now. Suppose it is obvious being closer to the huge financial resources in Nth America.

April 30, 2009 | Unregistered CommenterWarwick Hughes

Warwick,

For resource stocks the Venture Exchange in Toronto appears to be the place to be. I don't know why the ASX does not get more coverage and we are just as guilty as the rest for not paying more attention to what is going on in Australia. Never mind, we will try and redress the situation in future months. We have tracked a few stocks involved in Australia such as Laramide but did not purchase them on the ASX, habit I guess.

April 30, 2009 | Unregistered CommenterUranium Stocks

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