There has been a bullish short term developments with some ASX listed Uranium Miners on Friday (06/01/2017). I use this NYSE listed URA ETF as a proxy to analyse that sector in a weekly time frame taking a medium term view. I will summarise it’s trend definition of as follows :
Long Term trend: Down
Medium Term Trend : Flat/Trading Range/Congested.
Short Term Trend : UP ( Bar by Bar, taking higher highs and higher lows into consideration)
Therefore, summary of it’s current trend may be read as : Within a major down trend, price action is congested in the medium term.
Lets’ drill this congestion area down to see which way it may potentially resolve itself ? Why ? Resolution out of this congestion area may be the key determining it’s next major trend, which is currently DOWN. Promise, I will try my best keep it simple.
- Since November 2016, after a successful retest of the previous low (Jan.2016), and the confirmed short term bullish pivot point reversal, URA price action had only paused for a breather in it’s short term trend. A bullish short term development which can not be overlooked. Can this short term bullish development be enough to change it’s medium and long term trends ? In time we will know.
- Position in the trend as of this writing : URA is flirting around the zone of resistance. Will it crack it with an upside breakout or will it retest its zone of support one more time ? Time will tell again. At this stage, we, as chart lovers put all the available evidence (Bullish or Bearish) before us and be GUIDED by THE PRICE ACTION ALONE. Read each bar in terms of control, commitment and keenness. All are positive as of this writing.
- There is a saying that volume leads the price. I think so, and at present, it is confirming what the price has done. Is it likely to continue that way ? In time we will know again. OBV ( On Balance Volume) at the top window is also bullish and broken out already. Will the price action follow suit ? Same answer as before.
- Ratio analysis of URA ETF and XLE (Energy Sector SPDR NYSE) shown in the bottom window is still in a RELATIVE DOWNTREND. In short and simple terms, URA is still underperforming the broader energy sector SPDR XLE. A negative for URA.
- Last, I would be watching those boundaries of the trading range going forward. A trading range which price action swings between it’s support zone of $11.00 ( approx.) and resistance zone of $15.00 (approx.). Are there opportunities here in the short term ? No comment from me.
URA ETF weekly chart is courtesy of StockCharts.com. with thanks.
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