This Key Energy Producer Could Be Set to Soar

posted in: Energy, Uranium | 0

After enjoying a meteoric rise between 2002 and 2007 Cameco (CCJ) has endured an extremely challenging few years since the Fukishima disaster in March 2011:

 

CCJ_Weekly

Technically speaking, there are a lot of positive developments in the CCJ chart including a potential breakout from a 13-month downtrend:

 

CCJ_Trendline

And on the daily time frame there is a rounding bottom that has formed with a potential for a breakout above the $16.50-$16.75 area:

 

CCJ_Daily_4.22.2015

A weekly close above $16.75 and a breakout above the longer term downtrend line would project a move back up to at least $20 and more importantly signal that a long-term bottom for CCJ shares has been put in place.

Meanwhile, the fundamentals are looking much better for Cameco. Just this morning a Japanese court approved the restart of a nuclear plant and the world is still facing a sizable uranium supply shortfall over the next decade:

 

Uranium_Supply

Finally, as pointed out by Bank of America/Merrill Lynch analysts 2 weeks ago the key underpinning to the long-term bull story for Cameco continues to be the China urbanization/air quality story:

“We forecast rising 2015-20 U3O8 demand underpinned by China’s 29 reactors under construction, with a potential 30 more by 2023, as the country’s urbanization raises electricity demand and the need to curb CO2 emissions,”