Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Cameco Stock Rebounds Along With Uranium

By Andy HechtCommoditiesSep 28, 2021 07:56AM ET
www.investing.com/analysis/cameco-stock-rebounds-along-with-uranium-200603215
Cameco Stock Rebounds Along With Uranium
By Andy Hecht   |  Sep 28, 2021 07:56AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

This article was written exclusively for Investing.com.

  • Uranium is an energy commodity with lots of applications
  • The price moved higher over the past weeks
  • Cameco rebounded with the commodity
  • A highly speculative stock and metal
  • Levels to watch in CCJ

The commodity asset class has been nothing more than a bullish relay race since mid-2020. After reaching lows as pandemic-related selling gripped markets across all asset classes over the early months of 2020, commodities took off on the upside.

The first market to reach an all-time high was gold, as the yellow metal reached a record $2063 per ounce in August 2020. While gold corrected, other raw materials took the bullish baton. Grains rose to over eight-year highs in 2021. In May 2021, lumber, copper, and palladium reached record levels. In July and August, soft commodities exploded higher, with coffee, sugar and even frozen concentrated orange juice futures rising to multi-year peaks. Meanwhile, NYMEX crude oil rallied to a marginal new multi-year high in early July.

In September, natural gas took off on the upside, rising to its highest level since February 2014 when it traded at a high of $5.65 per MMBtu, over triple the price at the June 2020 $1.432 per MMBtu low.

Uranium does not trade on a futures exchange, but it is a critical energy commodity. Cameco Corporation (NYSE:CCJ), a Canadian uranium company, is the world’s second-leading producer. CCJ’s output accounts for approximately 15% of annual production.

Uranium is an energy commodity with lots of applications

Uranium is a silvery-white metallic chemical element. Uranium enriched to U-235 is a critical component for nuclear power plants and the nuclear reactors that run naval ships and submarines. Highly enriched uranium is an ingredient in nuclear weapons.

Yellowcake is a type of uranium concentrate powder obtained from leach solutions in an intermediate step in the processing of uranium ores. Yellowcake production is a step in uranium’s processing-cycle after mining but before fuel fabrication or enrichment. The world’s leading uranium-producing countries in 2019 were:

Source: https://worldpopulationreview.com/country-rankings/uranium-production-by-country

While Kazakhstan is the leading producer, it is second to Australia in uranium reserves. Russia, Canada, and South Africa round out the top five uranium-rich countries. Australia has around 30% of the world’s known recoverable uranium reserves within its borders.

The price moved higher over the past months

Uranium is another commodity that has moved to a new multi-year high over the past months.

Source: Investing.com/Trading View

As the chart highlights, uranium’s price climbed to the highest level since March 2015. The uranium rally lifted the price of the Sprott Physical Uranium Trust (OTC:SRUUF).

Source: Barchart

As the chart illustrates, SRUUF rallied from $7.50 per share on July 28, 2021, to the most recent high at $15 on Sept. 13. On Sept. 27, it was trading at the $12 per share level. According to Yahoo Finance, SRUUF had a market cap of over $902.5 million at $12 per share, with an average of over 687,000 shares changing hands each day.

Cameco rebounded with the commodity

CCJ produces and sells uranium. The company operates in two segments, uranium and fuel services. The uranium segment explores, mining, mills, and buys and sells uranium concentrate. The fuel services segment engages in refining, converting, and fabricating uranium concentrate and purchases and sells conversion services. It also produces fuel bundles or reactor components for reactors. CCJ sells uranium and fuel services in the Americas, Europe, and Asia.

CCJ’s headquarters are in Saskatoon, Canada.

Cameco Daily
Cameco Daily

Source: Barchart

As the chart highlights, CCJ shares reached rock bottom in March 2020 at $5.30 per share. The stock has made higher lows and higher highs, with the most recent peak coming on Sept. 13 at $26.57. At the $20.70 per share level on Sept. 27, CCJ corrected from the most recent high but remains in a bullish trend.

A highly speculative stock and metal

The price action since Aug. 19 shows the high level of volatility in CCJ shares, which reflects the price action in uranium since mid-August.

Source: Barchart

The chart shows the move from a low of $15.34 on Aug. 19 to a high of $26.57 less than one month later, on Sept. 14. CCJ shares exploded 73.2% higher. At the $20.70 level on Sept. 27, the stock corrected by 22.1%. The price action in CCJ shares and uranium has been head-spinning since mid-August as uranium joined many other commodities with substantial rallies over the past months.

Levels to watch in CCJ

At the $20.70 level, CCJ shares were trading at just below the midpoint of the move from $15.34 to the $26.57 high. The last time CCJ shares traded at the $26.57 high was back in 2011.

Source: Barchart

From a long-term perspective, CCJ surpassed its first technical resistance level at the most recent high. In March 2014, the stock reached a high of $25.84. the next upside technical target is the February 2011 $44.81 high. Above there, CCJ traded to its all-time peak in June 2007 at $56.00per share. Technical support is sitting at the August 2021 $15.34 low.

Nuclear energy demand is likely to rise as the world moves away from fossil fuels. CCJ is the leading uranium-producing company worldwide.

Cameco Stock Rebounds Along With Uranium
 

Related Articles

Korbinian Koller
Silver, The Loaded Spring By Korbinian Koller - Oct 24, 2021

The supply crunch might stretch as much as a seven-year event from now, but the spring is loaded already. It isn’t only a supply, demand scenario when talking about silver....

Cameco Stock Rebounds Along With Uranium

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email