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Gary Tanashian is proprietor of NFTRH.com and Biiwii.com. Actionable, hype-free technical, macro economic and sentiment analysis is provided in the premium market report 'Notes From the Rabbit Hole' (http://nftrh.com/nftrh-premium/). Complimentary analysis and commentary is available at the... More
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  • Uranium - Big Bid Right on Schedule 0 comments
    Apr 30, 2009 7:37 AM | about stocks: DNN, URZ, URRE, CCJ

    On March 21, NFTRH25 provided a chart of Uranium Participation Corp. (U.to) showing a distinct downtrend line, a break of which would indicate a potential return of positive sentiment to the beaten down Uranium sector. U.to is a play on spot uranium and is subject to fluctuations in its premium/discount to NAV, making it a good sentiment indicator. On April 11, NFTRH28 again noted the downtrend line in U.to (along with constructive looking bottoms in coal and palladium) with this view on commodity rotation: "While copper has run up to our target, other things are just getting started. Following are some commodity sector charts that still look constructive as far as bottom making goes. I am not necessarily recommending commodities be bought now, given that I have done more selling than buying. But NFTRH does not operate in a vacuum and should not be your only market analysis source. In the event you have good reason to be buying commodities, I would like you to consider the items that still have good looking bottom patterns in the making as opposed to those that have already blown upward. Remember what happens when the ‘hedgies’ come into the sector; it rotates like crazy. One manic play to the next. Casino style."

    Well folks, look who's in da house! U.to has broken out and individual U's are popping all over the place. This as things like copper and oil correct/consolidate their gains. Are you going to tell me the market runs sensibly on macro-fundamentals or are you going to tell me it runs like a high stakes, momentum driven casino? The U's are getting the play as the hedge fund whiz kids pick up the story. So predictable, so laughable and so dangerous for people who still approach the markets in a traditional manner.

    Here is the updated chart of U.to, along with several U's in launch mode. Look at the elephant footprints. These guys can't wait to stampede into the next 'play'. URZ was NFTRH's main play on the U's for a trade (and yeh, I sold it too soon, dohhh) but I've held... ah hell, I'll name it since Otto has been pumping it left and right over there at IKN ;-) FRG as an investment since the dark days of Armageddon '08 along with a TSX listed little guy that I have not named due to its relative illiquidity and penny stock status. But it, unlike the gold burdened (huh?) FRG, is in launch mode.

    As a side note, there is no better way to pitch a product than to allow prospective buyers to sample it. Historical NFTRH continue to be added here, where you can do some work and evaluate the letter for what it is, and for what it is not in these times when sentiment and perception have come to the forefront. NFTRH was among the analysis sources on the lookout for the current global market rally (Hope '09) and it seeks to be ready for what comes next, and sentiment-wise, things remain on track (as I type the Fed is touting the recession is weakening and the market is buying it). Is this a real recovery or is this the 'false dawn' that would ultimately break the hearts of the hopeful? Whether or not you choose to give NFTRH a try, please keep that question foremost in mind going forward.

    Back to the post's theme, here is U.to in its current breakout status.  A review of the average individual uranium stock shows a sector in launch mode.  Rotation indeed.

    Click chart for larger image

     

    Stocks: DNN, URZ, URRE, CCJ
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