Cameco Corporation (CCJ)

[Tommy]

$CCJ - Commodities Today: Oil And Uranium Looking Bullish

http://seekingalpha.com/article/1531182-commodities-today-oil-and-uranium-looking-bullish?source=yahoo

... "Uranium

Much of our focus recently has been upon Ur-Energy (URG), which has defied gravity and continued its climb higher. The stock has left everyone in the dust, including producers such as Cameco (CCJ) and Uranium Energy Corporation (UEC); two other names we are bullish of. For readers of ours who were not with us during the last uranium bull market we want to explain the industry and how the stock prices generally fluctuate.

Summer has claimed much of the gains some of the uraniums had, but defying the typical downturn has been Ur-Energy, which has nearly doubled since May.

(click to enlarge)

Source: Yahoo Finance.

First, in the early stages of the bull market the juniors who are bringing projects online tend to do best, a category that Ur-Energy finds itself in currently. Then the juniors who are in the exploration phase tend to power the sector higher as investors redeploy their gains in the next wave of mines. This is followed by the large producers outpacing the industry, which indicates that the party is officially over. Generally during this last phase the junior exploration companies have already seen their stock prices fall dramatically and it is pretty obvious as to what is happening.

With all of this said, we want to point out that we are yet to see the first phase as the entire industry is concerned. The rally is having the foundation put in place by those early birds, but it cannot start until the Russians officially pull out of their agreement to supply the world with cheap uranium. We expect this to happen, everyone expects this to happen and the Russians should do it as they will get over 5x more per pound by pulling out of the agreement. It is a simple business decision and one which is merely months away. This is why we are so bullish of the sector right now." ...