Uranium mining stocks had an extremely bad performance this week. Already back in February, InvestingHaven’s research team identified why 15 points in uranium mining stocks (URA) would have huge implications.
This week, URA ETF, representing uranium mining stocks, lost ten percent of its value. That is meaningful, and, more importantly, very impactful, as that sharp drop occurred right at that important level of 15 points.
That is a sign of weakness in the uranium mining space. Visibly, the strong rally between December and March got ahead of itself, and was too strong after such a long bear market.
Cameco Corp, symbol CCJ, a uranium miner with a market cap of $4B and one of the leaders in URA ETF, lost more than 8 percent today.
What’s next for uranium mining stocks?
The next stop for URA ETF is clearly 12 points, which is ten percent below this week’s closing price. It is almost given that 12 points will be reached pretty soon even.
What happens at 12 points will be so important for uranium mining stocks. That is because that level coincides with the bear market channel that started in 2011. If, and that is a big IF, URA manages to stay above that level, it would be a very bullish signal, as it would mean that previous resistance (previous breakout point, see purple circle) would become support. That is what investors call a textbook case of a breakout stock. Moreover, it would set a higher low compared to the lows of 2016.
However, if 12 points gives away, the bear market would continue, and 10.50 points would be the ultimate test.