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« Chris Berry: Lithium to Elevate Equities and Investor Mood | Main | Mickey Fulp: Long-Term Uranium Demand Will Continue »

Cameco Corporation: A Buy?

CCJ Chart 05 April 2011.JPG

Uranium stocks continue to remain at the mercy of every news release emanating from Japan, so the outlook is cloudy. However, there are number of stocks in this sector which have been battered including Cameco Corporation (CCJ), which raises the question of when is it right to buy. In our very humble opinion a layered approach into the acquisition of some of your favourite uranium stocks could be the strategy to adopt. If you can stomach the wild oscillations for the next few months a purchase now should look cheap in three to six months time.

Its too early to call but CCJ does appear to have support at the $30.00 level.
The technical indicators are in the oversold zone but look to have turned north with the RSI sitting at 36.74. The upside potential looks favourable from here with the downside being limited as the lions share of the damage has already been done.

For a summary of the situation in Japan we turn to this article which was carried by Reuters.

Following are main developments after a massive earthquake and tsunami devastated northeast Japan and crippled a nuclear power station, raising the risk of an uncontrolled radiation leak.

- Japan has asked nuclear superpower Russia to send a special radiation treatment ship used to decommission nuclear submarines to help it contain radiation from the plant.

- Operator Tokyo Electric Power (TEPCO) says it will release more than 10,000 metric tons of contaminated water from its crippled Fukushima Daiichi nuclear plant into the sea to free up more storage space for water that had much higher levels of radioactivity.

- Chief Cabinet Secretary Yukio Edano says there was no other choice but to release the water, which was about 100 times more radioactive than legal limits.

- Japan warns it could take months to stop radiation leaking from the nuclear plant.

- Engineers mixed sawdust and newspapers with polymers and cement to try to seal a crack in a concrete pit at the complex's reactor no.2, where radioactive water has been seeping into the sea. TEPCO said over the weekend it found the crack, which was generating readings of 1,000 millisieverts of radiation per hour in the air inside.

* Authorities do not plan to expand the evacuation zone around the stricken plant right now, a senior nuclear official says. The government created a 20-km (12-mile) evacuation zone around the site after the earthquake and tsunami.

- A central bank survey, underlining the concern over the impact of the crisis, shows that big manufacturers expect business conditions to worsen significantly in the next three months, though they were not quite as pessimistic as some analysts had expected.

- Radiation levels in the sea nearby stand at 4,000 times the legal limit.

- TEPCO has said it will scrap at least four reactors once they are under control, but this could take years or even decades.

- Japanese manufacturing activity slumped to a two-year low in March and posted the sharpest monthly fall on record as the quake and tsunami hit supply chains and output.

- A total of 12,087 people were confirmed dead by Japan's National Police Agency, while 15,552 are missing. A total of 167,700 households were without electricity and at least 200,000 without running water.

- Estimated cost of damage to top $300 billion, making it the world's costliest natural disaster.

The 1995 Kobe quake cost $100 billion while Hurricane Katrina in 2005 caused $81 billion in damage.

So there we have it.


Over in the Options pit, our model portfolio has managed an average return of 41.23% per trade, 68 closed trades, 66 closed at a profit, or a 97% success rate. Average trade open for 42.76 days.

SK Chart with profits re-invested 29 March 2011.JPG

The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.

Stay on your toes and have a good one.

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