Uranium Miners Selloff Continues On Japan Fears

With the tragedy in Japan still unfolding uranium miners took a major hit after they had already gone through a significant selloff before the earthquake occurred. For the uranium market, this is truly a black swan event as it was completely unpredicted, but will most likely have a major impact going forward. Uranium miners were formerly in bullish uptrends, but investors hate uncertainty, and they were sold off hard today. Two of the largest U.S. uranium miners, Cameco and Denison, are shown below. Notice how they both gapped down below their 30-week moving averages today.

With the heavy technical damage done to their formerly bullish chart patterns, both CCJ and DNN will likely have to go through a period of repair on the charts before some type of trend can resume. Of course it will be up to a combination of government leaders and uranium industry experts as to the path the nuclear industry takes going forward. One thing is certain this black swan event will be studied not only in the near future but likely for generations to come.

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2 comments

  1. Todd

    Even though the charts on CCJ and DNN are damaged I believe the fundamentals beneath uranium will move them back above their 200 and 50 mda more rapidly than expected. The Chinese will review their safety plans and go back and start building. There truthfully is no alternative to nuclear that you can scale up cleanly.

  2. Justin

    The problem with a big selloff on high volume is now there are a lot of holders of these stocks who will be looking to sell when the stocks bounce back up to recoup some of their losses. This creates overhead resistance the stocks will have to fight through to make new highs again. Typically you need a period of consolidation after a big selloff for strong hands to take control again who aren’t going to sell when the stocks approach their former highs. Adding the change in sentiment surrounding the uranium industry with the overhead resistance that has been created and I think a period of consolidation is most likely what will happen next. They could bounce a little more from here though, since they fell quite a bit.

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