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The Stealth Uranium Bull Market at Trader’s Narrative

While most of our attention is raptly focused on the current upturn in the equity market, a massive, stealth bull market has been ongoing for a few years, right under our very noses. I’m referring to the uranium market of course. You never hear about it on CNBC and you never read about it on the Wall Street Journal. But uranium (commodity) and uranium stocks have been tripling and quadrupling all over the place.

Soon the NYMEX will begin to trade uranium futures. Until then, the only way to get your hands on the actual commodity is through the Toronto Stock Exchange’s Uranium Participation Units (U). I covered U almost a year ago saying:

…a 50% premium is ridiculous. I would patiently watch for an orderly pullback (with low volume) and allow for a more palatable entry.

The pullback did arrive a few months after I wrote that (and it was on low volume also). It kissed the support/resistance line at $7.50 and reversed up to almost double at a high of $19 - all amounts Canadian dollars.

uranium participation units u april 2007.png

The chart still looks fantastic. My only concern is that it is a bit extended from its long term moving average (200 simple MA in blue). But notice how it tends to bounce off its 50 day moving average. That is the sign of a very strong uptrend and while you could try and run counter to the major trend, why would you want to? It will go up until it won’t. Until then, go with the flow.

The other interesting security is Pinetree Capital (PNP) which isn’t a mining company at all. It is a merchant bank that specializes in the resource sector. They have a very diversified but cherry-picked portfolio. Normally you wouldn’t be able to access this sort of expertise outside of private investments and hedge funds.

The following are a few other uranium plays. Most are on Canadian exchanges (Vancouver and Toronto). The two that are co-listed in the US are Denison Mines (DML and DNN) and the bellwether Cameco (CCO & CCJ). In this sort of bull markets, it pays to go with smaller, lesser known companies since they usually have much higher betas.

ABN Consolidated Abaddon Resources
AXU Aurora Energy Resources
ALS Altius Minerals
BAY Bayswater Uranium
BTT Bitterroot Resources
CCO Cameco (NYSE: CCJ)
CVV CanAlaska Uranium
CXX Crosshair Exploration & Mining
DML Denison Mines (AMEX:DNN)
EMC Energy Metals (NYSE:EMU)
FCO Formation Capital
FDC Forum Uranium
FIU First Uranium
FSY Forsys Metals
FRG Fronteer Development
JNN JNR Resources
KRI Khan Resources
LAM Laramide Resources
MGA Mega Uranium
MZU Mesa Uranium
NWI Nuinsco Resources Limited
PDN Paladin Resources
GEM Pele Mountain Resources
PNP Pinetree Capital
PTU Purepoint Uranium Group
PWE Powertech Uranium
QTA Quaterra Resources
RSC Strateco Resources
STM Strathmore Minerals
SXR SXR Uranium One
TXM Triex Minerals
TVC Tournigan Gold
U Uranium Participation
UEX UEX Corporation
ULU Ultra Uranium
UMN UraMin Inc.
UPC Uranium Power
URE Ur-Energy
UUU UrAsia Energy
UWE U308 Corporation
WNP Western Prospector Group

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5 Responses to “The Stealth Uranium Bull Market”  

  1. 1 Wolf Stone

    Hey trader,
    just wanted to say that since the bull market in uranium has been around for a couple of years i think most of the easy money has been made already but i still have a few investments in junior uranium exploration companies and am making a bet more on management than anything else. With regards to Pinetree Capital i think that it is an ideal way for investors new to the resource sector to gain some exposure while minimizing risk. Cheers…

  2. 2 Babak

    agreed. Although bull markets are notorious for continuing to go up well after ‘everyone’ thinks they should stop doing so ;)

  3. 3 Samizdat

    Which of these forty-one plays has the best fundamentals?

  4. 4 Babak

    I dunno. I’m not a fundymentalist. I only play one on TV.

  1. 1 Uranium Bull Market Over? U3O8

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