Jim Letourneau's Blog

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Uranium Update - Game Misconduct

I spoke about 3 Big Picture Trends in Energy at the Calgary Resource Investment Conference this weekend. The trends I spoke about were in uranium, natural gas and decisions (in other words government policy). I didn't record my speech or use any slides but my notes on uranium were as follows...

The supply demand picture remains strong... but uranium is in the penalty box.

Right now its a major penalty - if Japan doesn’t tie up their issues shortly it could turn into a game misconduct. Most uranium stocks have gapped down... they could move lower still...

Watch Cameco (CCO.TO, CCJ) for signs of sentiment change.

I suggest watching Cameco because it is the industry leader and it is very rare for a junior uranium company to sustain an uptrend while Cameco is in a downtrend.

This is likely a reaction to news out of Japan that radiation levels are higher than first thought. If leaks continue they could eventually reach or exceed Chernobyl's emission levels. Cameco's chart says it all, a game misconduct. There is long term trendline support at $26, and other support levels exist all the way down to the 2008 low of $14.03.  If you jumped into uranium stocks after the first leg down, be mentally prepared to make an exit if Cameco's downtrend continues. The game misconduct could be accompanied buy a suspension.