Uranium stocks have outperformed the market in 2023, with the Global X Uranium ETF (URA) up nearly 38% for the year. However, the sector is more volatile in 2024, noting that a correction phase in February resulted in an 18% drawdown in URA. We believe the recent volatility in uranium stocks provides an opportunity to capitalize on their cyclical uptrend. URA’s late volatile price action has resulted in a mid-term trading range that now gives the chart a bullish cup-and-handle pattern. This also applies to the Sprott Uranium Miners ETF (URNM), which completed the base stage (the “cup”) we featured on X last November. After February’s retracement, URA found its footing above support at the January low (near $26.60), reinforced by the 40-week moving average on the chart. Last week, URA broke above short-term resistance at the 10-week moving average, which correlated with a mid-term oversold rise in the weekly stochastics. This is a positive technical catalyst that increases the likelihood of overcoming long-term resistance near $31.30. A move above $31.30 would complete URA’s cup-and-handle pattern in a long-term bullish development, supporting its cyclical and long-term uptrend. A breakout would also produce a long-term measured move target of around $43, which is more likely to be tied to 2025. URA is the largest uranium ETF, with $3.2 billion in assets, and has a reasonable expense ratio (0.69%). It’s worth noting that URA’s largest holding, Cameco, accounts for about 23% of the ETF. Cameco’s weekly stochastic is rising oversold in a bullish primary trend, which makes it similar to URA. Disclosure: The above is subject to our Terms and Conditions and Privacy Policy. This content is for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to purchase any security or other financial asset. The content is general in nature and does not reflect any individual’s unique personal circumstances. The above may not apply to your particular situation. Before making any financial decisions, you should strongly consider seeking advice from your own financial or investment advisor. Click here to view the complete disclaimer.
