Denison Mines Corp. trading in a range

Jan 11th, 2016 – Comment

Sellers in control of the market.


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DML LOGOIn your opinion, which company provides the best long term option in the industry Denison or Fission? Wouldn’t it be Denison seeing it is focusing most of its work in the Athabaskan basin? Any thoughts would be greatly appreciated.

Thanks,

Todd

 

Hey Todd,

 

Thanks for the assignment. I will undertake a study of Denison Mines Corp. (DML TSX) at this time and next time I will examine the case for Fission Uranium Corp. (FCU TSX).

This will be the fourth time since 2010 that I investigate the details surrounding this stock. The last time was on July 31, 2015 when the shares were trading for $0.65. Peter was concerned about what he called a death spiral that had engulfed DML.

The research indicted that the shares had been selling off since March of 2014 as it came off a high near $1.90. An established downtrend was in place and it was noted that a death cross had formed in July of the same year. There was no improvement through the first seven months of 2015 as DML registered a series of lower highs and lower lows. Every attempt to move higher was met with selling as the shares approached the 200-day moving average.

The momentum indicators on the six-month chart pointed to a speculative trade developing which, although short lived, took the shares to near $0.70.

 

DML

The three-year chart illustrates that sellers are still in control of the market. The downtrend line and the death cross continue to dominate the trading environment. Since October of 2015 the shares have been meeting resistance along $0.70 but have broken above the 50-day moving average.

 

 

 

 

 

 

DML2

The six-month chart pulls into focus the resistance along $0.70 and the range bound pattern with support near $0.47. The evidence at hand indicates that DML is not a buy and hold stock. You would be best served trading this one for profit.

I continue to hold to my thesis that all forms of energy need the excess supply in the oil markets to contract and that we need to see China’s growth accelerate. Until one or both transpire it’s hard to see what might ignite demand for uranium.

 

Next time I will probe the charts for Fission Uranium Corp. (FCU TSX).

 

Make it a profitable day and happy capitalism!

 

 

 

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