Uranium Has Put in a Bottom: A Look at 2 Stocks in This Space

Now is the time to look at companies/stocks that could benefit from higher uranium prices in the months ahead.

Low-priced Energy Fuels Inc. (UUUU) was upgraded Tuesday to Hold by TheStreet's Quant Ratings service. This small uranium company trades at less than $4 a share and may be considered too speculative for many investors so we will offer another name in this space. First, though, let's look at UUUU and a chart of the actual commodity.

In this futures continuation chart of uranium (below) we can see that prices are in a downtrend from 2011 and a new base has formed. From late 2016 a pattern of higher lows and higher highs can now be seen.

Source: CME

In this weekly bar chart of UUUU, below, we can see a long base formation going back to late 2015. Prices are above the rising 40-week moving average line and new highs for the move up have been established. The weekly On-Balance-Volume (OBV) line has been extremely strong this year and shows aggressive buying. The weekly Moving Average Convergence Divergence (MACD) oscillator is bullish.

In the weekly bar chart of Cameco Corp. (CCJ) , below, we can see a similar base pattern and the breakout from the base happens closer to $14. Prices are above the rising 40-week moving average line and the weekly OBV line and MACD oscillator are bullish. I have included this stock at around $12 for your consideration instead of a stock below $4.

Bottom-line strategy: The commodity has put in a bottom so now is the time to look at companies/stocks that could benefit from higher uranium prices in the months ahead.

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Please note that due to factors including low market capitalization and/or insufficient public float, we consider UUUU to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.