Continuing on the previous theme , that is that electricity is the basis of civilization and that we are running out of fossil fuels, one would think that nuclear power would get rather popular rather quickly. Markets are notorious in their ability to ignore reality for the longest time and then, all of a sudden, acknowledge the inescapable and catch up real fast. Having been too early in liking this stock once before I hesitate to recommend it now. But should it drop further and make a slight new low below the March 2009 one (roughly below $15), then it would seem to me to be a compelling buy.
In EW terms the stock should trade at a new low under $15 to fulfill the pattern shown in the Bigchart. Then, depending on the degree of wave 5 into the top, it should not trade below $10as this would cause overlap (the top is actually wave 3 and for the past 5 years we have been doing wave 4). Looking at the shorter term chart, there is no question that it was an A-B-C corrective rally, which should be completely retraced. The structure itself is a 5 wave move with a 5th wave diagonal expanding triangle (that is a wedge). It appears to need one more push down to complete. It should then trade back to the origin of that wedge ($27.50). An ideal point would be where the wedge is equal to wave 1, 2 and 3 combined, see black arrow.
CCO
Cameco just kept going (but did not quite reach the original target), but I thought it was a buy at around $24,50 or so. So we are essentially flat on the trade. I still think this one will go to $30 as a minimum, and it should do it fast. The count may be wrong, it may just be 5 down but the end result is the same. Time will tell.
CCO
If you use a sharp pencil , you could say that today’s low is right in the trend-line. More often than not it does not even get there. The stock could still drop to the $22 level but regardless where you buy it, it should have a rebound to the $30 level.
RIM has dropped slightly below the trend-line. Things have never been so dark so from a contrarian view it must be a buy.
Ford also had one of these diagonals. It too exceeded the trend-line briefly. Now it is in the correction of the first bull leg. As mentioned earlier this correction can be very deep and should look like and a-b-c. $11 is where c=a, $10 is the low point in the triangle on the way up and a 60% correction would take the stock to just under $8. Where it will, in fact stop, time will tell but on average a buy at $10 will probable be profitable.
CCO, F, RIM
Did not expect this just a few weeks ago but it did make sense. This is a expanding diagonal that should retrace in full, implying a move back to $30 or even $32 as a minimum. My guess is that the entire structure is an A-B-C where C is vector equal to A.
CCO
Yesterday’s announcement by Germany that it will discontinue nuclear power generation some 15 years earlier than previously thought, brought the stock down by about a dollar and it is possible that a diagonal 9 as shown) could form. However, it is not clear how they will pull this off and some cynics conclude that it is little more than posturing to get the Greens on side on another Greek support proposal. I do not think a diagonal will form, but it could.
CCO
It is quite possible that no further moves down are coming; the red line connecting the lows may have done its work by providing support. A look at uranium itself makes this very plausible;
According to InfoMine.com the stuff hit a low of about US $ 40 per pound around June of 2010 well before anything had happened at Fukushima, Japan. Recently China’s nuclear Energy Association announced that it will boost atomic capacity 8 times by 2020. India announced a similar expansion of production of electricity using nuclear fuel 13-fold by 2030.All of this should lead to a doubling of the demand for the fuel, never mind what other countries will do.
CCO, Uranium
Cameco would ideally have another small leg down but the possibility definitely exists that the drop is done. A very shallow diagonal may have formed and the triangle shown earlier may not exist. Unfortunately I cannot get the necessary detail on these charts.
My guess would be that we are already on the way up if we break $27.25 in which case the big fat line referred to earlier turned the tide.
CCO
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