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…

When will the sell off in Cameco & Uranium One end?

Cameco Corp – Symbol CCO on TSX & CCJ on NYSE

Short-term Downside targets: 26.87, 26, 24 and 22

Uranium One: Symbol UUU on TSX

Downside target: 3 & 2.5