Uranium Analysis & Cameco in 2024

This year, I haven’t discussed uranium as frequently, but the renewed focus on reliable electricity sources from governments, utilities, and large tech companies has pushed nuclear energy back into the spotlight. With its minimal carbon emissions and potential for steady, long-term power generation, nuclear energy might be the key to future energy strategies.

Uranium, as the primary fuel for nuclear reactors, could benefit significantly from this shift. In today’s analysis, we’ll explore the uranium spot price through Fibonacci retracement levels and discuss its implications for the market.

Analyzing Uranium Price with Fibonacci Retracement

One of the most useful tools for chart analysis is Fibonacci retracement. To analyze the uranium spot price, I’ve applied Fibonacci levels to significant price points.

• First Fibonacci Setup: Starting with the low of $17.50, marked as the 100% level, I placed the 0% level at the $44 peak from November 2014 (marked in blue). This initial move saw prices hitting the 161.8% Fibonacci level before falling back near the 0% level.
• Second Fibonacci Setup: Next, I adjusted the 0% to the $73 peak from February 2011 (marked in orange). Here, prices once again approached the 161.8% level and then retraced back to nearly 0%.
• Current Fibonacci Setup: Finally, with a possible new uptrend, I’ve laid the 0% level at the $93 high of November 2007 (marked in pink), with a target near the all-time high of $136.

These setups provide insight into potential support and resistance zones.

Cameco Corporation: A Benchmark for Uranium Stocks

When analyzing uranium stocks, a good reference point is Cameco Corporation (NYSE: CCJ), one of the largest uranium producers globally. Its price patterns give insight into the broader uranium sector.

Interestingly, the June 2024 peak in Cameco closely mirrors the stock’s all-time high from 2007. This alignment suggests that historical tops can often serve as reference points for future movements. However, since June, Cameco’s stock has experienced a 30% correction, with current prices approaching a key pivot level between $31 and $33. This correction phase is important to monitor as we look for signs of renewed strength.

Round Bottom Formations: A Classic Pattern for Growth

One of my preferred technical patterns is the round bottom formation. While these setups don’t often signal a quick buy for short-term traders, they are excellent indicators of a stock gearing up for exponential growth after a consolidation phase.

Example 1

Comparing Cameco’s chart with PTC Inc, we see a similar price action. Both charts feature an upward movement followed by a two-step price fall (marked in purple arrows). The second step is longer but correlates closely.

After consolidating at a higher price level (marked by cyan rectangle), both charts were hitting the all-time-high (marked by cyan arrow). Cameco is now approaching the breakout stage marked by purple arrow. Could we see next move as PTC Inc?

Example 2

Looking at Advanced Micro Devices Inc (AMD), we see another example of a round bottom formation. Cameco’s test of its ATH and pullback to the cyan rectangle (=consolidation at higher price level) mirrors AMD’s phase. Possibly hinting at potential upward movement.

Key Uranium Companies to Watch

The uranium sector remains relatively under the radar, with limited activity compared to other industries.

However, this table shows the largest uranium companies by market capitalization. It’s clear that there’s significant potential, but also caution is warranted as these stocks can be volatile.

When we sum up the market capitalizations (MC) from this list, we reach approximately $42 billion. Given that not all uranium companies are included, and many have dual listings, a reasonable estimate for the total uranium market could be around $100 billion. To put this in perspective, each of the top 100 companies in the S&P 500 has a market capitalization exceeding $100 billion individually. This highlights how relatively small the uranium sector is compared to other major industries.

Performance Comparison of Uranium Stocks

Another key metric to watch is stock performance over various time frames. The table below shows the performance of uranium stocks over one day, one week, three months, and year-to-date. Interestingly, shares surged on Wednesday, September 11, driven by news that Putin suggested Russia might restrict exports of uranium, titanium, and nickel.

Stay Ahead with Uranium Stocks

As interest in nuclear energy grows, uranium stocks are set to play a vital role in the energy sector’s evolution. Keep this list of companies on your radar if you’re interested in uranium opportunities. They could drive the sector’s next big move, making them worth watching closely.

Want to learn more about Uranium Stocks? Watch video