Big Move for Sprott's Physical Uranium Trust ahead if ... .
Sprott's Physical Uranium Trust did it finally:
It broke out of the confluence formed by a horizontal resistance zone from Oct. 07 and the bearish wedge to the upside. The new target now is high from April 07.
However, there's some water in that wine:
The breakout is not really supported by volume and the daily chart shows that momentum has been fading for a while now. So a direct continuation of the recent rally becomes more likely if volume picks up next and we see some decently sized green candles immediately following the current one so a bearish divergence (e.g. in the MACD) can be negated rapidly now. If not, a pullback down to CAD 25.20 or 22.60 becomes more probable to me. Things become bearish if price drops below 22.60. Below that, price might tank further down to 20,20 and even 18.00. If that happens, something must have changed fundamentally, so I don't know where things could go from there.
Strategy idea how to play this:
One could remain bullish until 22.60 and regard CAD 25.20 and still 22.60 as buying opportunities. However, one should seriously consider putting a Stop Loss below 22.60 in the weekly chart. If someone doesn't own U.UN yet: One could enter with a fraction of the intended position now to get a foot in the door, see if the pull back happens, and buy the other fraction(s) once the pullback targets might be be reached.
It broke out of the confluence formed by a horizontal resistance zone from Oct. 07 and the bearish wedge to the upside. The new target now is high from April 07.
However, there's some water in that wine:
The breakout is not really supported by volume and the daily chart shows that momentum has been fading for a while now. So a direct continuation of the recent rally becomes more likely if volume picks up next and we see some decently sized green candles immediately following the current one so a bearish divergence (e.g. in the MACD) can be negated rapidly now. If not, a pullback down to CAD 25.20 or 22.60 becomes more probable to me. Things become bearish if price drops below 22.60. Below that, price might tank further down to 20,20 and even 18.00. If that happens, something must have changed fundamentally, so I don't know where things could go from there.
Strategy idea how to play this:
One could remain bullish until 22.60 and regard CAD 25.20 and still 22.60 as buying opportunities. However, one should seriously consider putting a Stop Loss below 22.60 in the weekly chart. If someone doesn't own U.UN yet: One could enter with a fraction of the intended position now to get a foot in the door, see if the pull back happens, and buy the other fraction(s) once the pullback targets might be be reached.