Tuesday, December 01, 2009

Technically Uranium

Since my last post on November 22nd in which I remarked on a range-bound tightening between $6.35 and $7.30, let's see what our benchweather U.TO has done:

The conclusion? Not much from the looks of it. Closes have been in the range of $6.58 to $7.00 Cdn, so pretty much stuck in the ever-contracting triangle.

In the short term, if my hypothesis stands correct, the trading range becomes even narrower as we head into the end of the year. Specifically in the next two weeks, breakout above 7.2 (ideally 7.4) or breakdown below 6.45 may be important. RSI at 20 certainly indicates some immediate support as evidenced by today's trading action; you can see that this is the fourth time this year RSI has dipped to that level.

It is interesting to see this stock from a different perspective:


Ever since the precipitous fall from grace in April 2007, uranium has been trying to establish a base for the better part of a year now. I can almost convince myself that I see half of a bowl being drawn out, which would be an optimistic viewpoint.

 

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