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Uranium Update

from ChartWorks:: published by Institutional Advisors

Bob Hoye
Technical observations of RossClark@shaw.ca
November 5, 2006

Sparked by Cameco’s problems at Cigar Lake on October 22nd, the junior uranium stocks have exploded in the past week. Many have achieved the initial technical targets established on October 18th. These were assumed to be objectives that could be met ‘in the next few months’ as uranium stocks made their normal seasonal appreciation relative to the oil patch into the end of the year.

Event driven moves such as this cause the beneficiaries to get ahead of themselves, becoming overextended with RSI(14) readings into the 80’s. This is now upon us. The sector has split itself into two groups; those trading at new highs and those only making a retracement rally (68% to 78%) of the decline from the highs earlier this year. Examples of each follow.

Look for the stocks trading at new highs to produce a CCI(8) reading below –100 while giving back up to 30% to 40% of the rally, testing their breakouts and 20-day exponential moving averages.

The following stocks are still shy of their highs. I would look for the corrections to be in the order of 50% to 68% of the October rally and produce RSI(14) readings below 40.

Bob Hoye
November 5, 2006

EMAIL:: bobhoye@institutionaladvisors.com
CHARTWORKS WEBSITE:: www.institutionaladvisors.com

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