From Taki Tsaklanos: Things are changing very rapidly in the uranium mining space. In the first two months of 2017, uranium miners broke out strongly only to come back down to test major support right now.
Uranium mining stocks, represented by the URA ETF, fell more than 3 percent on Monday. That is a sharp decline which follows a 20 percent fall in two weeks.
It was only some 6 weeks ago that we wrote how Uranium Miners Successfully Tested Their Bullish Breakout. Last week, we warned that Uranium Mining Stocks To Start A Strong Fight Between Bulls And Bears In March 2017. For now, that fight between bulls and bears is playing out very fast. For now, bulls still have the benefit of the doubt, as URA still trades above major support. However, the steep decline in recent weeks suggests that bears are quite powerful.
The outcome of this fight will depend on how strong the 15 point level in URA ETF will be. It is hard to forecast what exactly will happen, but given the huge trading volume since last December, we believe there are quite some bulls active which could step in around the current price level.
Investors should give it a little bit of time to understand whether bulls will be strong enough to defend their major support which is being tested right now.
The Global X Uranium ETF (NYSE:URA) was unchanged in premarket trading Tuesday. Year-to-date, URA has gained 20.28%, versus a 6.34% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Investing Haven.