UUU

CCO Cameco

Hamilton

cco mar 2011 2 cco mar 2011

Cameco is, I think , is the worlds largest producer of fuel for nuclear plants. It has had a few flooding problems of its own at the Cigar Lake mine etc.etc. but apart from that it is still the big boy in the sand box. They are like Potash Corp., they even hail from the same province and are neighbours in a manner of speaking.

The Japan tragedy has caused a knee-jerk reaction against nuclear power. Mirroring that the market is now rather fond of solar gadget producers like FSLR. Both are probable misplaced! Nuclear power contributes somewhere between 15% at the low end to 70+% at the high end (France) of the worlds needs for electricity. As it stands there is no known alternative, even if they may one day change to a less belligerent  fuel (thorium as opposed to uranium ?). Solar on the other hand has a bright future but probable not in the next 3/5 years. Our Canadian government, as so many others, has agreed to feed-in-rates that are sometimes a tenfold of the actual costs. Rather than confess their sins they prefer to stall the system by way of administrative delays, hurdles etc.etc. There are untold numbers of farmers etc. that have installed a small fortune on their roofs only to find out it may take 10 years for the connection to the grid! Most of the producers are inefficient but free markets have not prevailed and some of these companies are going to be decimated.

My guess is that CCO is a buy at about $23. By the way, UEX, UUU,and DML (Denison) all have similar chart patterns.

UUU , POT

Hamilton

UUU NOV 14 2010 POT Nov !$ 2010

We recommended selling UUU at $5.25, it reached $5.30. Also we loudly recommended selling POT at $160 well before it had reached that level. Both these stocks have (stylized) patterns that are indicative (possible) of a longer term top. They are A-B-C s from the lows, clearly corrective at least so far. Both are predicated on the  notion that China is going to eat a lot more and a lot better and generate a lot more electricity the nuclear way to satisfy its needs. RBC’s, if I am correctly informed, analyst has opined that POT should target $170 within the year and others have similar targets and some are even higher. Of course the American CEO of the company has already made it abundantly clear that the stock should barrel through $240 no problem. Time will tell but I am just a little agnostic about this one. Looking at the bigchart it seems to me entirely possible and plausible that the $240 or so high WAS the bubble high.Here is the chart.

POT BIGCHART 2010

The “corrective” a-b-c that we had up from the lows may well be just the middle intermission so to speak, of a much larger bear pattern that could have a second leg down ( even after we reach $170). In an environment that has been politically poisoned it may just be that no one else is willing to play ball and that Billiton’s price was correct to begin with. In Saskatchewan  they forgot how important it is to make hay while the sun shines.

With regard to uranium I have no idea why it might be peaking here, if that is what it is doing. One interesting possibility might be that we (and the Chinese) are soon going to convert to thorium as a fuel instead of uranium. It has the disadvantage that you cannot make bombs with it (which obviously has secretly been behind the desire to have these plants) but it is available in abundance all over the world, burns up completely so no waste problems, and is easier to control ( no 3-mile island or Chernobels).

UUU Uranium, a proxy for TSE?

Hamilton

UUU May 5 UUU Nov 2010

 

On May 5th it was suggested that this stock could rise to, at least the highest point of a 4th wave (triangle?), but at the time it was already approaching $4 so when it does reach $5.25 you will only have a return of slightly more than 30% over  6 months. The reason I show this one is that it has the typical structure of a correction, an A-B-C up from the lows, which may be applicable to the TSE overall. We mentioned this with respect to Manulife, which was hinting at this possibility for quite some time and there are many others. (by the way, I would sell MFC now if bought at around $11).

TSE Nov 2010

Problem is I cannot get a clear count on this , other than that the moves from Jan. to June 2010 were, in their entirety, a B wave of some sort, perhaps in an A-B-C X A-B-C  sequence. Irrespective of what the count might be (even the gurus in Gainsville seem to have a problem getting it right) , what is clear is that at a retracement of , give or take , 73+% the issue becomes pretty moot. It would seem like nothing ever happened which is a little hard to stomach. I prefer to think that the whole thing is rigged to the nth degree, that the Feds are so afraid of the consequences that hardly bother to keep up appearances and are not just supporting a plunge protection team of like-minded financial institutions but are blatantly targeting the stock market. The rather nefarious happenings around Potash here in Canada, are a good example of what goes on behind the scenes.

In any case at 73% this has to stop soon or we will be making new highs- this after the second great depression-. One cannot but wonder how much was real and how much was fabricated. Both the RSI and MACD are strongly suggesting a pull back is imminent, perhaps the second C is complete.

CCO May 5

Hamilton

Cameco is the largest uranium miner in the world. It is a little water logged but that problem will pass. For the moment nuclear energy is the only big scale realistic solution for the energy problems of the world so demand for its product presumable will continue and expand.  The chart supports that (long-term view). Here it is in the big picture.

CCO May 5

At first blush this is a initial first wave followed by many years of downward movement in wave 2, perhaps while the Russians were decommissioning there submarines and other rusting toys, followed by a third wave up. I assume it is all a third wave simple because the structure suggests it and there are a distinct 9 segments (5+4). That is followed by (perhaps incomplete) wave 4, which so far is a very clear a-b-c, where c is more or less equal to a. In this count wave 4 cannot overlap wave 2 and indeed it does not, 12/13 for wave 2 and 15 for wave 4. The risk in buying CCO was therefore very low at $15. Here is more detail.

CCO may 5 2

Notice that wave C is more or less equal to A. The exact termination point could be argued but either way this has the potential to go at least to $45 or even new highs  OVER TIME. At this very moment it appears a little overbought given the RSI and MACD but give it a week or so it still looks like we are in a small 3d wave up, so despite ,perhaps ,a few dollars pull –back I suspect we go on for a little while yet. The real critical point is around $31+, if it can breach that (overlap) the world opens up for higher prices. Depending where one owns this, it may, in a zero cost environment, be sensible to sell here and buy again at $32 (something I have great difficulty actually doing).

Long term, as in this count waves 2 and 4 do not alternate, thought should be given to this wave 4 becoming a multi-year triangle. We are in that scenario in wave b of an a-b-c-d-e sequence. This b should get to about $50.  DML is an alternative at a lower cost but not as robust.

UUU May 5

UUU, click to enlarge, suggests that there is still some room ahead immediately, also lower that $1 is about as bad as it can get coming from $18. There are probable others in this space.