Nearly everyone in recent months has lost a ton of money, swearing to never touch the space again.
But it’ll be their loss as oversold stocks in one of the most hated sectors start to move higher…
I’m talking about uranium.
Take a look at oversold shares of Cameco (CCJ):
MACD and DMI just gave us a buy cross — where the blue line crosses above the red.
The stock has found solid support at current prices of $19.50, and after consolidating for the last month or so, we could begin to see Buy catalysts on coming news.
Fukushima absolutely destroyed nuclear stocks, no question.
But smart investors are lining up to jump back in. Here’s why you should join them…
The Next Bull Market
Uranium has one of the strongest outlooks I’ve seen.
The number of reactors is expected to surge from 430 today to more than 820 by 2030.
Coupled with a nuclear resurgence around the world, this bodes well for underpriced nuclear stocks…
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Japan Prime Minister Yoshihiko Noda is expected to restart nuclear sites in just days to “protect jobs, the economy and the survival of the economy…” There are great fears that one region could have 15% energy shortages over the summer.
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China could re-launch nuclear power ambitions to stimulate the economy. Leaders have already approved its 2020 nuclear-safety strategy and have already inspected existing nuclear reactors. The move could be a sign that more reactors could soon be built. In short, China has very little intention of abandoning nuclear ambitions. A multi-month safety inspection of current nuclear operations indicates all is well.
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China’s National Nuclear Power Company is planning to IPO on the Shanghai Index to finance new nuclear power projects.
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India has plans to grow nuclear power capacity from 5,000 megawatts to 63,000 megawatts by 2030.
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The UK and France recently inked a declaration for cooperation on nuclear energy.
And then there’s the supply-demand issue: Uranium demand has always outpaced supply. And it’ll only get worse.
According to Cameco, the largest producer of uranium in the U.S., we could soon see a much wider gap in supply and demand.
Last year, 170 million pounds of uranium were consumed — but only 140 million pounds were produced.
And the Russian-U.S. Highly Enriched Uranium agreement, expected to expire next year, could remove as much as 23 million pounds of uranium from the market:
The problem with uranium stocks right now is that they’re too cheap (cheaper than before Fukushima).
To me, this says investors are still coping with fear over more meltdowns — but they shouldn’t be.
As long as countries like China and India (the “smart money”) are forging ahead with plans to develop nuclear power, uranium demand will remain strong.
Uranium may be out of favor right now, but the stocks I’m finding are just beginning to gain ground.
That said, I recommend you open a long-term options contract in Cameco.
But don’t wait until the Wall Street crowd figures out they missed the momentum.
Stay ahead of the herd,
Ian Cooper
Analyst, Wealth Daily
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