Wednesday, January 10, 2007

Uranium Stocks Correcting IV

Indeed, the broader market was not satisfied with just a three day correction and have retraced further. Uranium stock were pounded today, speculative ones moreso than producers, with some of the more precipitous parabolic stocks dangerously close to their 50 day MAs. Opportunities to buy uranium stocks will arise as a result of this correction but the entry point remains uncertain.

Peter Grandich of The Grandich Letter was on RoBTV last Friday and I really liked his comments:

On Uranium:
I think uranium stocks going through a correction, good that they are..I am still extremely bullish, $100/lb uranium when not if..being bullish since $18, raising target price thrice, just raised from $75 to $100..only very early concern that I would express is starting to see some froth in junior resource side..overconfidence..if it continues and shares double or triple without a lot of low volume, I would grow more concerned..$100 fairly safe bet, think juniors still have multiple returns in them

Although tempting to buy some uranium stocks right now, I still see more pullback ahead as the broader market figures to bottom out sometime in the next week or two. Remember, the supply-demand fundamentals of uranium remain the same, unlike many base metals at the moment; for example, inventories even in high-flyer zinc have gone up in the LME and that metal has corrected 17% just this year.
 

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