There was some strong bullish momentum in the uranium market in the 2nd half of last year. This year the uranium market is muted to bearish. There is a strong divergence though: the uranium spot price vs uranium stocks. We like this, as it probably sets uranium miners up for amazing discounts, especially the uranium miners that deliver value. What to make out of this, and what about our Uranium Stocks Forecast for 2019? And is this market ready to be picked up as a top investing opportunity?
If anything the divergence between a stable uranium spot price and bearish uranium miners is THE one and only thing that matters for investors looking to get exposure in this space.
The uranium spot price as seen on below chart is looking increasingly solid. Note the following:
- A series of higher lows in the last 36 months!
- Another attempt to break through resistance (dotted yellow line) which was former support in 2014.
- A breakout in December of 2018 which got tested (successfully) in June of 2019.
This all looks great, we call it a bottoming pattern and it sets the stage for future bullish momentum.
We want to add that based on our conversation with uranium investing specialist Justin Huhn there is more factual and fundamental evidence of momentum building in the uranium market. In this interview he talks about a bullish evolution which is based on the SWU price data point, you can forward to 30:30 in the video.
In the uranium stock space it is a small catastrophe. We believe this is the total wash out, the puke phase, before things get better.
How to play this market?
Very simple! Accumulate near these rock solid bottoms, especially quality miners. The returns will be big, but the timing is unknown.
Regardless, at a certain point, this market will become bullish again, similar to the silver market in 2019. That’s when you want to be invested in it, and only take a last position. That’s when we will flash a strong BUY alert as per our INVESTING MOMENTUM method!
Ed. note: In the meantime would you be interested to know which quality miners exactly to pick up? We might want to offer great investing research insights for you, just drop us a note on our email address or through our contact form.