Saturday, December 16, 2006

Two Uranium Charts: CCJ and RTP

Uranium stocks have been on fire of late, bottoming in November and soaring towards intermediate highs. Two stocks that are on my watchlist are CCJ (Cameco Corp.) and RTP (Rio Tinto PLC). While RTP seems stronger, as the 50 day MA is pointing up and has crossed over the 200 day MA, I am a bit concerned about the RSI reading. Note that RSI at the late October highs was higher than the current RSI reading.

Now take a look at the RSI reading for CCJ. While price is still about a point away from the $42 intermediate high, RSI is higher than when it reached that level. This leads me to believe the stock will breakout from the intermediate high and challenge all-time highs which are at $45.

Due to the concerns with both stocks, I will likely wait for a breakout over resistance (CCJ at $42 and RTP at $230) on strong volume before entering, rather than making a riskier entry pre-breakout.

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