Cameco Corporation produces and sells uranium worldwide. It operates through three segments: Uranium, Fuel Services, and NUKEM. The Uranium segment is involved in the exploration for, mining, and milling, as well as purchase and sale of uranium concentrates. Its operating uranium properties include the McArthur River/Key Lake, Cigar Lake, and Rabbit Lake properties located in Saskatchewan, Canada; the Inkai property situated in Kazakhstan; and the Smith Ranch-Highland property located in Wyoming, as well as the Crow Butte property situated in Nebraska, the United States. The Fuel Services segment provides refining, conversion, and uranium fuel manufacturing services. The NUKEM segment trades in uranium and uranium-related products. The company sells its uranium and fuel services to nuclear utilities.
Take a look at the 1-year chart of Cameco (NYSE: CCJ) below with my added notations:
CCJ’s trend has simply been a down one since the end of April. However, over the past few months the stock has created a key level of resistance at $12.50 (red). A break above that $12.50 level should mean higher prices for the stock, and yesterday CCJ finally broke that resistance.
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The Tale of the Tape: CCJ broke through its key level of resistance at $12.50. A long trade could be entered on a pull back down to that level. However, a break back below $12.50 could negate the forecast for a higher move and would be an opportunity to get short the stock.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach