Cameco hit one year high

Following the Fukushima nuclear disaster in Japan, Cameco (CCJ), the world largest uranium producer, has been struggling for 2 years. As I discussed in Nov 2013, I though uranium had touched its bottom and a light at the end of the tunnel could be seen for Cameco.

Last Tuesday, Japan announced details of the new Basic Energy Plan, which designated atomic energy as an integral part in meeting the country’s long-term electricity needs. After 2 years' struggling with high costs to meet its power need based on expensive imported natural gas, Japan has to abandon its previous decision to phase out the country’s nuclear reactors. Now the energy plan outlines steps to restart reactors that were closed following the Fukushima Daiichi nuclear plant disaster in 2011. This is extremely good news for uranium companies.

As you can see below, CCJ has basically moved around within a box in the past 2 years after its plunge. Now it has just jumped out of the box top for the past 12 months (around $22) and it is quickly approaching the 2nd box's top. Watch for the price of $25. If it can firmly break through this resistance level, which I believe so, CCJ will truly start its bull run with the sky as its top. This is another severely beaten down sector that no one wanted. But if it wakes up and starts to run, no one can stop it and everyone will chase it.

If you are really a risk taker, you may also look at a tine uranium exploration company, U3O8 Corp. (UWEFF). In a super bull run, penny stocks may skyrocket ten times or more. As you can see, UWEFF used to be at the $4 level and it is now trading at $0.15. You may make a lot of money if you bet right but you may also lose everything you put in. So be cautious about your position size if you want to bet this one.