PUBLISHED BY INSTITUTIONAL ADVISORS
May 6th, 2009
Technical observations of RossClark@shaw.ca
The uranium sector has come to life once again. After two years of being out of favor, price have broken out of well established down trends and money flow is expanding on the upside. A number of stocks in the sector bottomed in October (i.e. Cameco, First Uranium, Paladin,UR-Energy, Uranium One, Uranium Participation Corp) and have been steadily stepping their way higher. These are now generating overbought readings on the weekly charts.
In the past two weeks pretty much every stock in the sector has popped with the recently illiquid ones having the largest percentage moves. Such signs of excessive exuberance are indicative of danger just around the corner. On a daily basis, most of the late bloomers now have overbought Relative Strength and Stochastic readings.
Based upon the development the 2000-2003 base and the rising trend of 2004-2007 we would expect the current strength to be followed by a downside correction that straddles the 50-day moving averages before the next advance.
Levels to watch for:
BOB HOYE, INSTITUTIONAL ADVISORS
May 6th, 2009
CHARTWORKS WEBSITE:: www.institutionaladvisors.com
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