Uranium stocks aren’t closely followed because of their lackluster performance over the last decade. However, they’re back on some investors’ radars as it approaches a potential breakout area. ☢️
We’re referring to the Global Uranium ETF ($URA), pictured below. The monthly chart shows prices in a clear downtrend, breaking to new lows during the COVID crash. However, it rallied aggressively with the rest of the market through the end of 2021 and has since been correcting since.
This week, it’s catching traders’ attention as it tries to break out from a downtrend line drawn from those 2021 highs. Bullish traders argue that a close above that line this week would signal the beginning of its next leg higher. However, a downside break of this pattern below 17 would likely signal the start of its next leg lower. 🔮
As for what’s driving this strength, Cameco Corp. ($CCJ) is roughly 24% of the ETF’s weighting, and the top 10 holdings make up 64% of it. Here’s a partial view of the fact sheet, which shows holdings of U.S. and globally-listed companies it offers exposure to. 📝
Ultimately we’ll have to wait and see whether this breakout occurs. But the uptick in activity around these names is certainly notable. 👀