Home > commodities, equities, technical analysis > Will Level 7 be the death knell for Uranium stocks?

Will Level 7 be the death knell for Uranium stocks?

Japan upgraded increased the severity level of the Fukushima nuclear accident to the highest possible at level 7… global equities and uranium stocks were hard hit today.

Uranium miners were recovering from the sharp fall and it looked like the worst was over but except with Level 7 the worst might be yet to come? Almost 4 weeks ago I posted charts of uranium miners Cameco & Uranium One… let’s see where we stand today. There are many exploration and development stage companies but these two are the prime Canadian uranium producers.

Today’s price action in Cameco (CCO.TO) is interesting and perhaps suggests that the worse is over…

  • The stock traded an intraday low of 26.38 and sharply recovered to close at 27.16 which is above major support lines (blue & red/green).
  • As I pointed out in my previous post, if we break here, downside targets are 26, 24 & 22.
  • On the upside, there is plenty resistance in the 30-34 area and my guess is that this stock will be range bound given the fundamental situation.

Uranium One (UUU.TO) is hanging on to support at rising trend line (short blue line).

  • Next support is near the 3.25-3.38 range and is rather strong with 3 converging trend lines, long blue line, pink line and bottom support/resistance line.
  • After that support is at just above 3.00…
  • On the upside, there is strong resistance at 4.00 which is where the recent relief rally reversed…

  1. April 12, 2011 at 10:51 PM

    I’d expect major rebounds in stock values for Uranium suppliers – in reality the world wide demand is only going to increase in the long-term so after the panic is done, the price has to come back.

    • April 13, 2011 at 8:51 AM

      yes, but some of the uranium producers already have this future increase in demand built into their stock prices and fundamentally, I think this future increase in demand will be pushed out further into the future.

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