Still Watching this Uranium Leader $CCJ – May 25, 2023
This is Scott with your Chart of the Day. A couple of months ago I talked about uranium as potentially something to watch. I noted that the URA ETF ( NYSEARCA: URA ) seemed to be kind of bottoming a little bit. It was coming down to a pretty clear level, where the buyers started to step in again.
You can see here back in 2022, around this $18.00 level, buyers are stepping in, buyers are stepping in. It then takes a trip back above the 200-day moving average, it can’t hold that rally, and it comes down and tests this level again right around $18.00. And then in March, the same kind of thing. It came down to this level, it came down to this level.
And so this has been printing some progressively higher lows over the last couple of months here. You can see this is a little bit of a wedge, maybe this is a giant bear flag and then it is ultimately going to break lower and the commodity trade is done for another cycle. That is very well possible.
But last night in my Strategy Session for members of our premium website, StockMarketMentor.com, I noted Cameco ( NYSE: CCJ ) as one that kind of caught my eye. It was just kind of as I was skimming through some stocks. CCJ ( NYSE: CCJ ), I just noticed, huh, it has a little bit of a cup pattern and a little bit of a handle pattern.
The longer-term trend, as you can see, is really just kind of sideways. If I zoom out here, CCJ ( NYSE: CCJ ) has been going sideways for almost 2 years. That’s interesting to me. Now obviously, a stock like this, and most commodity-driven stocks, are ones that have a lot to do with macroeconomics and geopolitics and stuff.
So if, for whatever reason, America or another big nation-state says, Hey, do you know what? We are going to switch to clean nuclear energy or something like that, heaven forbid, I think these stocks could be something to watch. And I am just noting that it is tightening up. It has a little bit of a cup and a handle, and it has a nice long base.
I can draw this nice long base of consolidation right there. And then I can also draw a little bit of a pinching pattern right there, and we can see, the price action is tightening. So I think it makes sense to have an alert on CCJ ( NYSE: CCJ ) right around that $29.00 level.
That is going to tell you that this is potentially breaking out of this consolidation zone. Now, you are going to want to see that break out, but you are also going to want to see it hold above that level. It is one thing to get above, it’s another thing to stay above.
And so, I think it makes sense to keep an eye on this as it breaks out, in the event that maybe somewhere in the world they switch on some more nuclear power plants, like, I believe, is happening right now in Japan.
So that is one chart that I am watching, kind of just keeping an eye on, the corner of my eye. I will look at it once a day and say, “Okay, nothing to do.” Or I will set an alert like I am doing here on my charting platform. And say, “Okay, if it breaks up above 29.00 I will set an alert just below. Maybe there is something going on with this stock.
And so while the commodity trade, especially energy in the form of XLE ( NYSEARCA: XLE ), has been painful for most of 2023, I think keeping an eye on CCJ ( NYSE: CCJ ) as it is above all the major moving averages and tightening near a clear resistance zone, makes total sense.
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