Weekly data and thoughts. . Please note that all my views are for short-term only, and I could be wrong, so please dyor. . . .Uranium Sector Overview- . From a weekly perspective, LOT had another decent drop. Moved from 17 to 15.5. So in 2 weeks has gone from 19.5 to 15.5. Among big stocks, one of the most poorly. Not sure why, but numbers are saying that. Clear signs that LOT is not the same as last year, in terms of play. In good times, it used to be a runner. Not anymore. Its struggling to get over my first level number of 20.5. Not sure what is happening, but numbers are saying that. LOT still has around 8.5% shorts, 17th highest shorted stock on ASX, 6th highest U stock to be shorted, a dubious number to hold for a big rise. Lets hope it decreases. . Personally, I am not playing as high as some other big U stocks, because of this new LOT behaviour, being timid. I mentioned last week that I had still picked up a few at 17, let go half at break even and am down for other half, for now. . Key Numbers to watch for stock share price? . If it goes to plan, then we may see higher prices. These are the numbers I feel could be in play - . 20.5 - First level, very good chance of that happening 25.5/26 - Second level, reasonable chance, also this is current high number of 2025 32 - Third level - this is October 2024 high. Beyond this we go to July nearly year back. If we reach here it will represent nearly 150% from its low . If things don't go to plan, it needs to hold 16. First number was 17, but it was breached this week. On moderate drop, 17 can still be crucial. .. . Review of topping of CYCLE 1 2025 statement?
Point 1 topping- For last 3 months, I have been writing that CCJ (and sector) may top between end of May to mid June as part of first cycle of 2025 - Current situation - Not sure about topping yet because we are still playing. But some stocks, including CCJ at a 52 week high
Point 2 new high for CCJ- I had also been writing that as part of this, the odds of CCJ make a new high above 62.55 is very good, and the first level to reach will be high 60s for it - This has certainly happened. This week CCJ crossed 62.55 and made a high of 68.15
. Review of KEY indicators? Lets look at 3 key indicators that provide market direction for short term, same as I have been doing for last few months - .
CCJ - Monster week - moved from 60.42 to 66.66, a gain of over 10% for the week
BOE/PDN - BOE lost 4% and PDN lost 1% of the week - small play happening, but different play from CCJ which is in ascendancy. Also PDN which was lagging BOE is slowly catching up.
Spot Futures - on weekly slight drop, around 1%, last week 70.50, this week 69.75, but now below psychological 70
. . So what are the numbers telling?
Mixed signals and disconnect between some stocks.
On the one hand, CCJ, the leader of the industry, going from strength to strength, doing a new 52 week high and not yet showing signs of topping.
On the other hand a lot of U stocks still stuck in first gear, or should I say, breaks have been applied and not showing same strength or playing similar to CCJ
Last couple of weeks I was writing CCJ seems to be in consolidation mode. 2 weeks of consolidation had happened. So time wise it was ready, and it did break out of consolidation this week
CCJ pattern has been very consistent - consolidation and then a big move, and then repeat. Same play from in 50s, around 60, etc .
Why other U stocks not playing like CCJ/URA?
There seems to be a disconnect between some stocks which are making new 52 week highs and some that are stagnating or easing down from current position
One of the reasons most U stocks are lagging is because they are thinking we may be topping here. In previous years, this the time the sector has topped. From here it goes in a decline for next couple of months before making a low sometime in August. Many may be aware of this cycle. And many may be pre-empting that scenario and getting out now (or not adding more).
Second could be that sector is very volatile. Who knows CCJ could drop 10% in a day. So many punters want more confirmation that the higher price achieved by CCJ can be sustained, before making a move in other U stocks.
This disconnect was also very visible around 2 years back. I was writing every week then about that. That time the disconnect was more stark - between US and ASX U stocks. US U stocks were doing a runner but ASX U stocks lagging big time. This time many US U stocks are also not following CCJ in tandem
Uranium is still very highly shorted stock. The big 6 ASX U stocks are within the top 17 of all ASX stocks shorted. BOE/PDN rank in top 2. So shorters may be making it difficult for the rise in some U stocks to happened. Probably a controlled play, with some exiting, gradual decline in shorting, and then letting it go, so there could be a lag in rise
In my spreadsheet, I update 52 week high number every few months. I updated it this week. All the 52 week high number, on average decreased by 30 to 50% from previous number. That means the play in last 52 weeks is much weaker than previous period, which is very concerning
Punters may have done better just playing ATOM (the URA ETF). It made a new 52 week high this week. Has done better than most other ASX U stocks. Sometimes playing in ETF is not bad (you play sector rather than the vagaries of individual stocks)
. Personally,Last week I wrote that I had maxed out in U stock play. I also wrote that I do a play a bit nearly every day. I am still playing U stocks as I have not yet seen the signs of topping, especially by CCJ. And I feel if CCJ continues to move up, other U stocks may catch up, hopefully. What I have seen now is that many U stocks are doing a wilder swing, around 15/20% now between the highs and pullbacks. I have increased the amount I play for these swings. The ASX U stock play this week was concerning, first red flag I could see. So keeping an eye on that. . . So what may happen next week?
Last week I had written it would be defining moment for CCJ as it had done consolidation and ready to move. It made its move this week.
CCJ gained around 10% for the week and difference between low of consolidation and current high made is around 18% (57.63 to 68.18).
CCJ made the high on Monday. Then dropped around 8% from high on Tuesday. In last consolidation, the drop from high to low was around 7.5%. So the drop consistent with how CCJ is playing - which means it can consolidate in mid to high 60s and then make a move to 70s. Odds are not bad.
CCJ finished in 66s on 4 days this week, which is a very strong play
Shorts are declining for U stocks but not much. BOE has dropped a bit but still number 1 shorted stock on ASX , but other 5 big ASX U stocks are not declining. That has to come down
On Monday, US U stocks had a moderate to good day, so should be a positive start on Monday - it is to be seen if it is actually going to end positive or not, based on this week's play. But lets hope so.
. Here is the Figures for the Week:.. . .
LOT Price at posting:
15.5¢ Sentiment: Hold Disclosure: Held
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