If you listened to my bullish calls from December 27th and/or February 24th about Uranerz Energy Corp. (NYSEMKT:URZ), Uranium Resources, Inc. (NASDAQ:URRE), and Ur-Energy Inc. (NYSEMKT:URG), then congratulations - you're now up as much as 50%, depending on when you stepped into a trade, and which stock you chose. Now get out. See, as well as URZ and URG have done and are doing (URRE not so much), it looks like the short-term rally I first spotted a little more than a couple of months ago has fully run its course, and now these names are setting up a pullback.
Yes, I know at least two of those three stocks are up today, and those two names look like they're still going strong. When you take a closer look at those two charts though, it looks like the mostly-industry-wide rally is hitting a wall today.
Take the daily chart of Ur-Energy Inc. as an example. It's been red hot, and even hit a new high today. Between the bullish opening gap and the new multi-week high of $1.99 and the subsequent sharp pullback shortly after the strong open, we can see that other traders - the so-called smart money in particular - are using this strained surge (which looks like something of a last gasp for the bulls) to lock in their gains on URG. Wise traders will take the hint.
Ditto for Uranerz Energy Corp. It's had a good run since the very first look in December, and has had a nice run even just since the second look at uranium stocks on February 24th. But, the shape of today's bar for URZ shows an open and close (so far) near the low for the day. Considering volume was so strong behind the bullish push from yesterday, to see the lack of similarly bullish volume today - on the same day the stock is struggling to hold anywhere near its new high - we may well be at a short-term top.
As for Uranium Resources, Inc., in that it never really got a chance to participate in the rally that kicked off late last year, it's not due for any major dip.
With all of that being said, one thing needs to be made clear about my call on Ur-Energy and Uranerz Energy (and it needs to be said with respect to Uranium Resources)... this "sell" call is only a short-term call. Any and all of these names could be "buys" again after a healthy pullback. For URZ, a revisit to the 50-day moving average line (purple) currently at $1.46 could by the rebound point. As for URG, the 20-day moving average line (blue) currently at $1.52 - but rising fast - could be a big rally point for the bulls.
For more trading ideas and insights like these, be sure to sign up for the free SmallCap Network newsletter. You'll get stock picks, market calls, and more, every day. Here's what you've missed recently.
No comments:
Post a Comment