Yellow cake is another term for uranium. The price of uranium has soared in recent days and weeks and stocks such as uranium miner Cameco Corp. (CCJ) have broken out on the upside.
Let's check out some charts and indicators.
In this simple line chart of uranium, below, we can see a rounding bottom pattern from 2013.
In the daily bar chart of CCJ, below, we can see that prices tested the rising 200-day moving average line in August. In hindsight the August pullback was a great buying opportunity.
Trading volume surged recently as traders and investors piled into the stock. The daily On-Balance-Volume (OBV) line turned up sharply. The Moving Average Convergence Divergence (MACD) quickly turned bullish in recent sessions.
In the weekly Japanese candlestick chart of CCJ, below, we can see that the shares made a large base pattern in the $12-$8 area. Prices tested and held the rising 40-week moving average line.
The weekly OBV line is bullish and the MACD oscillator has narrowed and is close to a fresh buy signal.
In this daily Point and Figure chart of CCJ, below, we can see both a sharp rise and a price target in the $36 area.
Bottom-line strategy: Traders could go long CCJ at current levels or on a two-day shallow dip. Risk to $18 for now. The $36 area is our price target for now. Higher price targets could develop. There are other smaller miners in the uranium space but I would consider them speculative.
