Skip to main content

The Globe and Mail

No turnaround in sight for this uranium miner

This analysis will conclude the assignment from Jeff, who asked for a review of several stocks. The last stock on Jeff's list is Uranium Energy Corp. (UEC).

I have conducted analysis on three other uranium stocks in 2014. They include Ur Energy Inc., Fission Uranium Corp. and Bayswater Uranium Corp. What those assignments identified is that there was a burst of excitement in the sector in the first quarter on news that Japan intended to restart its fleet of nuclear reactors after having taken them offline after the 2011 Fukushima disaster. However the enthusiasm dissipated in the second quarter.

A scout of the charts for UEC will help identify how best to manage this investment.

The three-year chart indicates that a downtrend has been the dominant feature since the spring of 2012. What is also evident is the resistance along the 200-day moving average. There have been trading opportunities along the retreat, with the MACD and the RSI generating a number of buy and sell signals that the astute trader would have put to good use.

The MACD and the RSI on the six-month chart provided a buy signal in the middle of May when the shares bounced off of $1.00. The stock ran to $1.90 by the end of the month for a healthy gain in just a couple of weeks. At this time there are not many indications that UEC is on the verge of starting a new advance. This stock is similar to the others you are holding in that it would have to be described as a higher-risk speculative investment.

In building your assets to fund your retirement you may want to review your investment policy. High-risk speculative investments can make up a portion of your portfolio but I wouldn't advise that they should comprise one hundred per cent of your wealth. Every investor has their own personal profile that they have to manage. You would do well to get a better understanding on the difference between investing, speculating, and gambling.

Make it a profitable day and happy capitalism!

Have your own question for Lou? Send it in to

Story continues below advertisement

Report an error