The Uranium ETF (URA) has pulled back to an area where lately it’s bounced, often times very quickly. I pay attention to the RSI indicator a lot, and have found that when it stays between the 40-80 area it remains in a strong uptrend. When you combine that indicator with a 50 moving average, you can start to define some areas of potential support.
This isn’t a grand slam setup as this recent downturn has gone below the previous low, indicating that there is more weakness in this current downturn. In addition, it appears the 50 ma is starting to slope downward, therefore this downturn could easily turn into a deeper correction. I feel that instead of buying this dip, it would be safer to watch for some high volume accumulation days before entering into new positions. Should we break down from current levels on URA and the leading stocks below, we are likely heading much lower.
Here is a link from the very resourceful Tischendorf Letter that highlights just about every Uranium stock you could possibly want, with many in the Canadian markets. The two below that I feel have the strongest potential to bounce are DNN and URZ, due to their relative strength they’ve shown during