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« SK OptionTrader Outperforms S&P Eight Times Over | Main | Adam Michael: Base Stock Evaluation on $90 Oil »

Bayswater, Crosshair, Ur-Energy, Laramide jump as much as 25% Today

Uraniun Stocks Table 28 May 2011.JPG

Uranium stocks have been taking it on the chin since the disaster in Japan hit the Fukushima nuclear plant and sent the world into a spin. However, today we were given some light relief when the uranium stocks took off and headed for higher ground. Among the standouts were:

Bayswater Uranium Corporation (BYU) Up 25.64%
Crosshair Exploration and Mining Corporation (CXX) Up 18.18%
Ur-Energy Incorporated (URE) Up 19.05%
Laramide Resources Limited (LAM) Up 12.10%.

Its difficult to find a reason for today's jump in prices other the price of uranium appears to have stabilized and could now be in recovery mode having been battered over the last two months. However, scanning the air waves we found this snipet on Industrial Fuels and Power:

In the week ended 20 May, seven transactions were concluded as the uranium price retreated after an increase noted in the week on the back of persistent rumours that Fluor-B&W reached an agreement with a buyer for the purchase of up to 450tU as UF6 per quarter for the next 10 quarters. But the sale was not confirmed later in the week and interest waned as prices rose. By the end of the week, the spot price was reported at US$56.00/lb, according to TradeTech reports. After the weekend, The Ux Consulting Company reported a WoW fall of US$0.25 in its uranium price indicator to US$57.50/lb.

Uranium Chart 28 May 2011.JPG

While the Fukushima disaster has had no doubt a negative effect on the uranium prices, experts indicate that the market will recover. Many key nuclear power capacity nations, such as China, Russia and India, are still continuing to build new reactors, which will push up the demand for the fuel. The Commerzbank estimates that uranium will climb to US$69/lb this year and continue its upward trend to US$80 the following year. Deutsche Bank puts the price at US$65/lb t his year with US$5/lb annual rises over the next few years.

It looks to us as though the Commerzbank has influenced investors thinking at this point.

Over on the The uranium spot price could reach $80/lb by the end of the year, beating levels before the Japanese nuclear disaster, NYSE-listed Uranium Energy Corp (UEC) CEO Amir Adnani told Mining Weekly Online on Friday.

You may see $80/lb late this year or early next year, I think it’s within the next year at the most,” he said.

A few smiles would return to the bedraggled faces of this sectors investors if uranium did indeed return to $80/lb.

Our opinion, for what it is worth, is that there is still no alternative to nuclear energy and once the politicians stop pontificating and posturing the nuclear programmes will be implemented unabated. With that in mind it well be a good time to buy this dip in the full knowledge that it will be a white knuckle ride.

Regarding, we are pleased to report that we closed last week with two more profitable trades. The stats and the charts have been updated accordingly.

Our model portfolio is up 338.11% since inception

An annualized return of 128.07%

Average return per trade of 40.41%

81 closed trades, 78 closed at a profit

Average trade open for 46.27days

sk chart 22 May 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.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

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Reader Comments (5)

I also noticed a big jump in uranium stocks on Friday, as I hold quite a few of them. Since I could find no particular news to provide a reason for the jump, my assumption is that one, or maybe two, newsletter writers may have been pumping uranium stocks, or maybe some institutional buyers. Quite often, the answer will become apparent in the weeks ahead.

May 28, 2011 | Unregistered CommenterRobert

China and India is moving ahead with their future plans.

Nobody is pumping anything. Some of these stocks were trading under book value while the supply of uranium is tightening up in the future. We are going to see a bull market in these stocks, all the fundamentals are solid.

May 29, 2011 | Unregistered CommenterP

The reason for the jump is that Traxys North America has bought a job lot from the US Department of Energy that it was about to dump on the market effectively taking about 10% off the market.
It seems to be widely ignored by the market that the DoE has been dumping for the last three years which is why the market is so depressed. Everyone seems to focus on the Russian agreement ending 2013, thus creating a shortage, while ignoring the fact that the US government has tons of the stuff to get rid of.

May 29, 2011 | Unregistered Commenteruranium bug

It doesn't seem possible that a Traxys purchase of uranium METAL from the DoE would account for an increase across the board in uranium STOCKS. The buyers of uranium metal are not related to the buyers of uranium stocks. Another factor to support my position is that the uranium spot price would have increased, which it didn't. If the spot HAD increased, then a corresponding jump in stock prices may be the result. However, a lot of uranium stocks went up 16% to 33% in 1 day. I contend there is some other as yet unknown reason for the jump.

May 29, 2011 | Unregistered CommenterRobert

The metal and stocks often trade differently ;gold is a classic example ,at present . The stocks here are just catching up a little after the big Japan sell off but are nowhere near where they were and neither is anywhere near there all time highs of 2007/8. nor likely to be for at least ten years when the bulk of the new China ,India and KOrea plants come online. Rio Tinto have said there is not enough demand to warrant futher mining. There is no point mining the stuff if there are no extra plants to supply in the near term.

May 30, 2011 | Unregistered Commenteruranium bug

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