I sold URRE today near the close at 3.1433, my entry was 2.83 a few weeks ago. That works out to about an 11% gain which is fine with me. I consider myself to be lucky to even have a gain on this stock as its recent moves have been quite labored. I kept waiting for good ease of movement to the upside, but URRE was not able to get the job done. I am disappointed with URRE today and the rest of the uranium mining stocks. I have turned tail on this sector now and will stand aside.
One trading lesson I learned a long time ago is to trust your first instinct, either bearish or bullish you may happen to have on a stock. If you do not trust this instinct based on all the factors you use to make you mind up on certain trades then you risk being too slow with your decision making and eventual outcomes. Act quickly and decisively if the market tells you to do so.
The uranium price declined this week for the first time this year according to Bloomberg news. One down tick in the uranium price of course does not make a trend, but I think this could be a sign of near term weakness in uranium. I am also seeing weekly bearish divergences in some other uranium stocks and also potential weekly candlestick hammer reversals. The weekly candlestick reversals however will not be finished until the close of end of this week.
Today URRE almost completely bearishly engulfed yesterday’s candlestick and did so on about the same high volume range that we saw yesterday. We closed at the lows of the day but we are still sitting on short term up trend line support.
So URRE instead of getting a nice solid break out above the recent range, did the exact opposite, and did so on a high volume distribution and closed at the lows of the day. Not good.
Perhaps a retest to the 1.8 to 2.0 range is still in the cards which would be a longer term retest of the breakout level.
The white trend line in the chart to the left is a must hold up trend line. If that gets broken this week it will open the door to another possible bearish leg down.
URRE can still 'save itself’ if it does not trade any lower than 3.10 the rest of this week and then still somehow works its way into an upside breakout.
Uranium mining stocks are quite the volatile bunch and today is no exception to this pattern. URRE has been lagging some of its peers lately as well. So if the leaders in the group also start to break down, then it would put additional down ward pressure on URRE as well.