The sector that's glowing

I’m talking uranium. There’s an interesting sequence of technical events that’s been happening in this sector.

First, uranium suffered from Jun-Aug like most other industrial commodities (COPX, SLX, XOP), while value underperformed growth, and bonds rallied.

But then 2 weeks ago, the URA ETF retested a 5-year base, and then posted a strong rally.

URNM undercut support on the weekly chart and then reversed sharply. It’s gained an amazing 40% in the past 2 weeks. Currently, we’re looking at the largest weekly bar that this ETF has ever seen.

This is a great example of the phrase “from failed moves come fast moves in the opposite direction.” We saw the same behaviour in late July when Bitcoin undercut support, reversed, then rallied over 60%. I talked about this just a day after uranium bottomed:

Moreover, URNM is now the 2nd strongest ETF on my leadership board containing over 60 ETFs. It’s right behind REMX.

Of course, the strength we’re seeing is tied to last week’s post showing that the market continues to be in risk-on mode, and especially yesterday’s post showing the bullish picture for crypto. Uranium, crypto, steel, copper have all been part of the inflation trade:

Important DisclaimerThis blog is for educational purposes only. I am not a financial advisor and nothing I post is investment advice. The securities I discuss are considered highly risky so do your own due diligence.