Strength likely spills over into the periphery if we’re in an environment where gold and copper print fresh highs.
That brings us to my favorite chart this week…
Check out the Uranium ETF $URA:
URA completed a multi-year base in April 2021. It has since found support at a former resistance level marked by its prior cycle highs from 2017.
I’m sure this sounds familiar, as many risk assets have found support at similar levels in recent months.
Meanwhile, URA coils, forming a potential bullish consolidation. Here’s a closer look:
When I zoom in, I see a falling wedge pattern with five contact points.
I’m not crazy about trading diagonal breakouts. These patterns tend to evolve into larger consolidations and further sideways chop. But the chart offers clear horizontal boundaries to define risk.
I can’t ask for much more. And based on a top-down approach, URA captures the type of names we want to buy.
I see two ways to play this scenario…
First, you can get long against the Nov. pivot highs at approximately 22.
Or, you can wait for a decisive break above the 24.50 level, marking the June and Sept. peaks from last year.
Either way works! Entries aside, the targets remain the same. Our initial target stands at the 2021 highs at approximately 31.50 and a secondary objective at 40.25.
And if gold, silver, and copper are rising, I imagine URA is heading back toward 55. But I don’t want to get ahead of myself. All in good time.
For now, keep an eye on Uranium stocks. They have my attention and likely will for months and quarters to come.
What do you think?
Are you buying Uranium stocks here? Or am I crazy?
