NFTRH+; Uranium Divergence

Commodities of all kinds have been degrading for months now, as we have noted all along.  At some point there is going to be a counter trend bounce.  A couple weeks ago we noted that the price of u3o8 was going one way (up) and the ETF (URA) the other (down).  That has not changed.

After checking out Guest poster Steve Saville’s website I saw he has noted the same condition, only now ever more pronounced.  This prompted me to ‘+’ it for anyone willing to try speculating on counter trend bounces in deeply over sold commodities.

Here is Uranium Oxide, in a deep bear market but rising since June…

uranium

And here is the ETF of Uranium miners.  What is wrong with this picture?  Trick question… there is nothing wrong with it.  These are the markets and they sometimes do strange things.

While I am for the moment happy keeping high cash levels, those interested in Uranium might want to watch this divergence between the price of the commodity and the price of the mining ETF.  The bearish pattern measures a downside target of 12.85.

ura

Buy Target:  12.70 to 13 (assuming the price of Uranium Oxide continues to stay aloft)

Sell Target:  14 (assuming just a counter trend bounce; investors might have different views)

Stop Loss:  To suit risk tolerance below 12.70 (it’s a bear market; control risk)

Side Note:  Usually we will not revisit NFTRH+ trades with additional updates because all parameters are presented up front.  But since we’re here, please note that I have closed my Emerging Market short position (EEV) this morning per this post at the site.

I remind you that NFTRH+ updates are just trade setup ideas, which may not be revisited as the parameters are already noted.  They are meant as a starting point for further research if interested.