Yesterday we talked about three overlooked and unloved uranium plays here in Kamich's Korner. One of those companies was Cameco (CCJ) . Cameco was upgraded at a major sell-side shop so it is worth looking at the charts again and give some upside price objectives.
Maybe "yellow cake" will get some attention going forward. Meanwhile, let's examine the charts and indicators.
Looking at this updated one-year daily bar chart of CCJ, above, we can see the turnaround since October. Prices moved steadily higher in November and December and this year in January someone really stepped on the accelerator. Prices are above the rising 50-day moving average line and above the still-declining 200-day moving average line. A bullish golden cross of these two averages could happen by the end of January. Notice how heavy the trading volume has been since early October. Traders and investors are being aggressive.
The On-Balance-Volume (OBV) has climbed sharply and steadily, signaling accumulation. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in November for a go long signal, which got a fresh bullish signal just the other day.
We turned to a five-year weekly chart of CCJ, above, to show how important I think the recent change in direction is with the breaking of a two-year downtrend. Prices are above the 40-week moving average line, which should soon flatten and likely turn positive in slope.
The OBV line on this timeframe is also very strong and the MACD oscillator gave us a cover shorts buy signal and is very close to an outright go long signal, too.
This is a long-term Point and Figure of CCJ, above. The straight-down decline last year to $7.50 looks like a "wash out" move or a climax. Prices have moved straight back to the upside. The other thing I notice on this chart is that the major area of resistance is in the $18 area and above. CCJ has a lot of room to advance, in my opinion.
Risk? I would use a sell stop below $10.50 for now
