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Tuesday
Apr072009

Pennant on Uranium Participation (U.TO)

Uranium Participation, U.TO, appears to be forming a pennant therefore a breakout is due soon.

Pennant on Uranium Participation (U.TO)

However there is a fair amount of bearish technical pressure on U, making a upwards breakout unlikely.

Most notably the moving averages for U.TO are heading south, and the stock is still in a downtrend. This makes it difficult for the stock to mount any sizable rally, even if it did spike up out of the pennant formation, since the 200dma and (to a lesser extent) the 50dma are acting as resistance lines.

Also the MACD, RSI and STO are pretty much neutral in the middle of their ranges. If we were seeing oversold technical indicators, or a few bullish crossovers, then perhaps we could make an argument for the break up and out, but this is not the case. Therefore it is likely that U.TO will break down through the pennant and fall to $5.50.

It was also disappointing to see that U.TO only managed a feeble, short lived rally whilst the mainstream markets have been soaring this last month, again adding weight to the bearish argument in the short term.

The silver lining in this is that if you wanted to add to your position in this uranium stock then it might be at a discount in a few weeks.

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Reader Comments (3)

Oh no! It's the Uranium Stocks kiss of death! I know nothing about this company, but judging from their (US) recent track record (positive articles on Mega, Crosshair, you-name-it), I say SELL! as soon as you read these words. If you don't own it, stay away. Believe me, in two weeks, you'll think I was a genius!

April 8, 2009 | Unregistered CommenterJoeBronx

Joe,

Just for the record we have owned it for some time!

April 8, 2009 | Unregistered CommenterUranium Stocks

Mega has a nice day gaining 17.04% and Crosshair gained 7.14%.

April 8, 2009 | Unregistered CommenterUranium Stocks

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