According to a number of media reports I have read Wednesday, Russia said it will restrict trade in some goods and raw materials in response to sanctions from the West. These reports, so far, do not spell out what commodities might be involved and what countries might be targeted.
Some savvy analysts are watching uranium prices as the top-five countries that supply the U.S. its uranium needs are Canada, Australia, Russia, Kazakhstan and Uzbekistan.
There are not a lot of companies or securities in this "space" but let's look at a couple of ideas.
Sprott Physical Uranium Trust Fund
The Sprott Physical Uranium Trust Fund (SRUUF) (CA.U.UT) is fairly new and was started by the Canadian asset manager Sprott. They manage a number of precious metals and real asset funds.
In the daily bar chart of The Uranium Trust (CA.U.UT) we can see a bullish picture. Prices rallied strongly in August and then formed a large equilateral triangle formation. Prices broke out to the upside in late February. The height of the pattern at its beginning is C$5.50 and when that is added to the breakout level we get a C$19.50 price target. Prices are above the rising 20-day and 50-day moving average lines.
Trading volume has increased this year and the On-Balance-Volume (OBV) line shows a rise for its limited history. The Moving Average Convergence Divergence (MACD) oscillator is bullish.
In this daily Point and Figure chart of SRUUF, below, we can see a potential upside price target of $15.
In this weekly Point and Figure chart of SRUUF, below, we can see a price target in the $17-$18 area.
Cameco Corp. ( CCJ
) is the world's largest publicly traded uranium company. It is based in Saskatoon, Saskatchewan, Canada. Let's check on a few charts.
In the daily bar chart of CCJ, below, we can see that prices have moved higher the past year but a move above the November highs will refresh the uptrend. Trading volume has increased dramatically since September as investors have taken notice of the changing supply/demand situation for yellowcake. Prices are trading above the rising 50-day moving average line and the rising 200-day moving average line.
The On-Balance-Volume (OBV) line declined from November to late February but looks like it is starting to climb higher. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In the weekly Japanese candlestick chart of CCJ, below, we see a bullish picture. Prices are in a longer-term uptrend above the 40-week moving average line. The candles do not show a top reversal pattern and upper shadows are not significant.
The weekly OBV line is leading prices and is close to making a new high for the move up. The MACD oscillator is crossing to the upside above the zero line -- this is a new outright buy signal.
In this daily Point and Figure chart of CCJ, below, we can see that prices reached an upside price target in the $25 area.
In this next Point and Figure chart of CCJ, below, we used weekly price data. Here the software projects the $37 area as a potential target.
Bottom-line strategy: While we do not know for certain what, if anything, Vladimir Putin will do in the realm of economic warfare, we can get some ideas what might happen with these two uranium plays. There are a number of other smaller speculative plays but they are not suitable for the Real Money audience.
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