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.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation.
If you have questions, please contact us here.
Email
Email sent
Thank you, your email to has been sent successfully.