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Jul 15th, 2009 – Comment

  Good Morning Lou, Would you be so kind to give us your thoughts on the future on nuclear expansion in Asia and in particular with Uranium One who seem to be teaming up with important government partnerships through Japan and Russia. Seems to me they all want a piece of Uranium One to gain […]


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uranium1

Good Morning Lou,

Would you be so kind to give us your thoughts on the future on nuclear expansion in Asia and in particular with Uranium One who seem to be teaming up with important government partnerships through Japan and Russia. Seems to me they all want a piece of Uranium One to gain on market exposure through increasing future demand for uranium in Asia .Also if you can comment on the technicals for uranium one’s current pennant formation.

Thank you

Massimo

 

Hi Massimo,

The world demand for uranium is expanding with Asia expanding its atomic power capacity. There are currently 44 new power plants under construction  worldwide. All of them are being built in  China, Russia, India and Japan which answers part of your question about the demand for yellow cake.

In June of 2009 Uranium One announced the acquisition of a 50% interest in the Karatua Mine in Kazakhstan. The deal would see Russian interests own 16.6% of UUU and Japanese interests own 16.6% of the company. The Karatua deal will give UUU interest in a fourth property in Kazakhstan which produces 19.5% of the world’s primary supply of uranium. The company is also actively advancing projects in Australia which produces 19.3% of global supply and in Canada which produces 20.6% .

uuuThe three year chart shows that the long decline that started in 2007 was reversed and now the uptrend that started in October of 2008 has met resistance at $4.00.

Support comes in at $2.00 if it continues to retreat from these levels.

 

 

 

 

 

 

uuu2

The three month chart also indicates that UUU could not breakthrough resistance on the 50 day moving average after the sharp rise in June. What is noticeable since the June advance is that volume has trailed off considerably. 

There is a pennant formation on the chart which can indicate a continuation of the uptrend but it needs a rise in volume to confirm the opportunity. Resistance is now at $2.75 with support at $2.50.

Uranium One has a great fundamental story with increasing production and strong partnerships which positions the company for a promising future. But remember that we are in a trading market so you have to take profits when available and cut losses when evident.

 

Happy Capitalism!

Categories: Uranium
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