3 Nuclear Plays as Uranium Prices Bounce

Includes: CCJ, JETMF, URZ
by: HiddenLevers

The crisis in Japan is a PR nightmare of epic proportions for the nuclear industry. With every passing day the world watches, waits and prays for the 180 atomic samurais willing to sacrifice their own lives to avert certain nuclear disaster. With a plot as such, it is easy to get swept up in the 24 hr media coverage. Catastrophes of this magnitude tend to play on our emotions, and can drastically sway public opinion. For instance when I hear news about a plane crash, I may have jitters about flying in the next day. After all it is only natural, but I still end up doing so because it is the safest and the most efficient way to travel.

The same should hold true for nuclear energy. To date nuclear energy is still one of the most viable and clean method of generating electricity. That is why the Obama administration is steadfast in maintaining its commitment to nuclear energy as an integral part of its broader energy policy. More importantly, America isn’t alone in its position. Accelerated growth in Asia, has dramatically driven up energy consumption in this region. Asian tigers have no choice but to pursue an energy policy which incorporates nuclear energy. With all this in mind I would have to argue for a long term bullish stance on uranium. I still think Uranium has room to drop in the short term and at worst will bottom out at $33lb, from there I see a bounce back.

Chart created using Hidden Levers app

Using the HiddenLevers macro trend screener, I found Cameco Corporation (NYSE:CCJ), Uranerz Energy (NYSEMKT:URZ) and Crosshair Exploration & Mining Corporation (CXZ). These have all bounced back a little, and once we are past this nuclear crisis, these boats should float back up nicely as Uranium Prices rise.

Chart created using Hidden Levers app

There will always be critics of nuclear energy and without a doubt this disaster will be cited along with Three Mile Island and Chernobyl in their arguments. However, rising fossil fuel prices and the environmental impact of CO2 emissions will undercut any of these positions. It’s just being practical.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.