Ann: Consolidation/Split - PEN, page-316

Weekly data and thoughts.
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Please not that all my views are for short-term only, and I could be wrong, so please dyor.
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.Uranium Sector Overview -
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From a weekly perspective, PEN had a big drop, from 100 to 87, around 13%. it also made a new 52 week low of 86. Many other U stocks made 52 week lows this week (mentioned below), but PEN has another play - getting into production. Any further weakness may test whether that will happen, especially with Spot price also close to 17 month low. Lets hope we have seen the bottom.
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.Lets look at 3 key indicators that provide market direction for short term, same as I did last week.

• CCJ - gained around 1% for the week, last week 43.48, this week 44.04, but still below 45
• BOE/PDN - Lost around 16%/12% for the week, so big loss, but CCJ gained 1% on Friday, but still ASX U had bigger drop
• Spot Futures - Gained around 1% - Moved from 64.90 to 65.55 this week, so similar gain as CCJ, but still below 70

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So what are the numbers telling? Last week I wrote that it was playing with weakness. I feel that weakness has not gone. Most U stocks, ASX and US had a decent fall. The saving grace has been CCJ and Spot Futures, but they have not done enough.

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Why the weakness persists and what are the signs of this weakness -

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• General markets were looking very vulnerable, had dropped over 5% from top and going towards 10, but on Friday there was a big recovery, SP 500 gained over 1.5%, but markets still very volatile
• CCJ has not been able to close above 45 for all 5 days of the week. Couple of days, intra-day, it got over 45, but was then sold down. While it is below 45, odds of getting towards 38/40 is even, so danger is still there
• Spot futures is in constant decline for a long period. Although there was slight gain this week, but we are talking of play around 65. Just over a year back, it had reached 105. So that's a big drop.
• I have written many times around Supply and Demand. There is no credible data available that there is much issue of supply. Sometimes, I feel some groups create a hype around Supply squeeze, prices rise, they make their gains, and the rest are back to holding at same level. 2018 Supply squeeze was talked about, it is round the corner, 7 years has passed, we still waiting to reach that near corner
• US cozing up with Russia removes another catalyst that had propelled U sector, that may act as dampner in short term sentiment
• Many small and mid U (AGE/EL8/CXU/PEN/DEV) stocks made 52 week lows this week, Big stocks are getting close, PDN made 52 week low at 667 this week, BOE/BMN/LOT/DYL/SLX are all within 10/20% from lows - the buffer of around 50% away from lows has been severely damaged
• The ETF of URNM, representing average across number of stocks, made a new 52 week low on Friday in US at 33.75. So the average is saying we are at 52 week low. It represents how other U stocks are performing.

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The U sector of doing 50 to 100% gains and then giving it all away, that saga continues. People playing for long, have seen their portfolio go up 50 to 100%, then come back, then go again, then come back. For last few years at least. Previously a long term, someone might think 3 to 5 years. The way it is going, and the pattern, we don't know what that long term means. Every year people change their expectations and keep adding year or two to their expectations. There is no guarantee that this behaviour may stop soon, unfortunately, unless we see some numbers.
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So what may happen next week? On Friday, general markets had a big green, and US U stocks had a moderate green. CCJ still playing with fire, its finding very difficult now to get over 45. One year back this time it was on 42, so very close to where it is now. Last big drop happened in August, it reached 35.43 coming down from 56. In March last year, it reached 39. So nothing much has changed in last 1 year at this stage. Of course it also reached over 62, so lot of coins were made. U sector is now looking for a low of this phase. Question is - have we reached there or there is more drop coming? Odds of drop are even at this stage, while CCJ is below 45, Spot below 70. But as we have seen before, recovery is also very fast. So lets hope we have seen the bottom. All the best.

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Here is the Figures for the Week:.
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