Friday I received buy alerts on Uranium Resources (NASDAQ:URRE) and Uranium Energy Corp (NYSEMKT:UEC) and after checking out the charts I passed, because I don’t believe they’ve had enough of a correction that gives a trader a good risk/reward. I did some analysis on URRE that can be applied to any of these stocks in this sector. While these stocks could continue to set new highs after such a shallow pullback, sooner or later they’ll have a decent correction that provides a good edge.
I believe a decent entry points often has two key points.
- Time – Do you see how the chart (click to enlarge) of URRE based for 20 days before sprinting higher. I think it needs close to that amount of time to digest it’s recent gains before it can properly think of moving higher. It’s often during this period that traders become bored and move on to other stocks and miss out when it starts to move.
- Support – $2.95 proves on multiple time frames to be a nice point of support. One it is the first area of support by the fibs, and the other is the level of the peak reached by the original breakout. This move back to this support area will probably be swift and rebound quickly…so get your alerts ready.