Technical Analysis -- Why does URRE not perform as others?
Manny here are wondering why URRE is down when other uranium stocks are up, or when the spot price is up, etc.
Markets down just move in one direction and not all uranium stocks move in sync, except for the rarer occasions when the whole sector is moving very strongly. But stocks don't move randomly either, they move in specific cycles. Different uranium stocks may well be in different internal cycles and not move together. During the Fall of 2010 all of them pretty much went straight up from much lower prices. But since December a sector-wide consolidation has set in causing each stock to fall into their own specific "rythm" of dealing with consolidation, digesting the increase in prices and pulling back in various degrees, when investors and traders take some profits and contemplate the market, even may turn bearish for a while.
Traditional technical analysis has various tools to measure stock performance, to determine trend, momentum, conditions of overbought or oversold prices.
I performed a detailed technical analysis on this stock from the perspective of the Elliot Wave Principle, an advanced but not 'traditional' tool, which is unfamiliar to most traders. The Principle expresses that stock price move in what are called 'waves', peaks and valleys of price action.
Impulsive motion of the market is divided into 5 waves, 1 up, 2 down a little, 3 up (usually a lot), 4 is down consolidation, and 5 is another progress. Consolidations occur in 3 steps (A-B-C), A is a backward step, B a smaller forward step, and C usually a more powerful backward step that ends the consolidation.
In order to be able to explain current price action, and make predictions, one must analyze the stock going back as early as possible and assign the major wave progressions on the longer times scales of years, months, weeks. For this stock it is sufficient to go back to the lowest price after the collapse of this stock from double digits to 36 cents. Thats the start of this analysis, as it represents a new bull cycle for this market.
Continued.... (due to size)
Good luck to all URRE longs today. I will not be on message board for most of the day due to some errands I have to attend to.
Looking good pre market and reviews I read this weekend have the stock making a run to 3.60 resistance level during this week. Hopefully, we get there and then try 3.98.
RE: "shouldn't you use an exponential chart when using EMA? "
No, moving average are not dependent on the kind scaling you use for your chart. EMAs just give more weight to the most recent price action. Using EMA vs SMA is mostly a personal preference. I also look at simple averages often.
144 and 233 are Fibonacci numbers. If one accepts the concept that nature and human social behavior, including financial trading, all grow according to fractal mathematics based on Fibonacci sequences, then it only make sense to use such moving averages. And in all my analyses of various markets, I always find that these come a lot closer to being resistance and support than the conventional ones (50, 100, 200) which are just arbitrary and based on historical convention.
Well, not necessarily October for double digits, time scale is harder to predict. But there is potential for that starting in the Fall and into next year.
I don't have a crystal ball, there is never any guarantee that it's correct, until it is. But I think it's a good and reasonable model. I wouldn't know what any modification would look like at this point. If the market proves me wrong, well, then let it be so. It is always the market who is right, and I won't stand in the way to teach where I went wrong, so I will have to find the problem in my analysis in that case. There is such a thing as a stop loss, in case, and at this point, I already know I can't loose any money.
It all boils down to meticulous analysis and money management.
Everyone should recognize that the overall nature of the market is still murky. We all hear that uranium is the future, but that doesn't necessarily mean the miners are going to be eternal money makers. The mining industry is probably still in a larger degree bear market, and the fact that URRE is only a fraction of its historical prices is proof for that.
#1: Why do you use those moving average numbers (144 & 223)?
#2: Do I understand corrctly that you see URRE at around 10 in october
#3: (ironic): are you sure your analysis is correct, or do you want to modify it before reality prooves you wrong? (Actually I don't expect an answer)
Ok, here is a longer term chart, from 2004 to present. This shows how minuscule the current market action is for this stock in front of the bigger picture of the past.
The bars on the chart are daily increments.
The entire history is labeled in terms of the Elliot Wave analysis. A complete market cycle consists of 5 waves forward (1-2-3-4-5) and three wave back (A-B-C), and you can see this holds throughout the entire chart. This also lets us project future movement to some degree, simply by counting waves and analyzing what is missing, almost like counting cards at the casino. The size relationships between waves is very often described by Fibonacci ratios. This makes the analysis a fairly mathematical procedure, based on Fibonacci numbers and ratios. Notice that 5 and 3, the number of waves in a cycle are also Fibonacci numbers, as well as their sum (8). In fact the total sum of all waves in a complete market chart should ideally be a Fibonacci number, if one classifies waves correctly according to the theory.
This allows us to project a little into the future, which I have indicated by the dashed lines at the end of the chart. After this current run (wave green 5) we should see another consolidation in the summer, retracing the entire green wave sequence, followed by a very strong rally in the Fall into double figures, quite possibly, estimated by extension of the green sequence.
Going back, the chart tells you the amount of volatility that we should expect again on the way up, it is quite possible, in fact likely, to see retracements from 7 or 8 dollars back to 2, in very short periods of time, followed by the reverse, as well.
The moving averages on the chart are the 144 (blue) and the 233 (purple) day EMAs.
It really is silly to worry about 30 cent moves right now and to call investor relations when this happens.
I shall.... over the weekend. I think I will post the chart for the entire last two years, it puts thing in better perspective when you see the price relations on a larger scale. $3.xx is really a small number in the big picture.
Here it is......thanks unbeldi.
Do u think there will be another resistance level between 3.34 and 3.84? I vividly remember 3.60 stumping us a few times back in late dec and January.
Thanks for ur invaluable analysis. If I knew u were not far, I would invite u for drinks. U earned it.