In today’s edition of the Daily Stock Report, we are going to take a look at Cameco Corp (CCO.TO) which we last spoke about on May 24th, 2023, when it just entered the Favored Zone of the SIA S&P/TSX Composite Index Report at a price of $38.24. Cameco Corp. has risen 10 spots in the last quarter and currently occupies the 4th spot in the S&P/TSX Comp Index Report. Today the shares are at $52.61 representing an approximately 37% increase since entering the Favored Zone 5 months ago.
It seems like there is a renaissance brewing in the nuclear industry as the price of Uranium has doubled over the last 3 years. As such, the sentiment for Uranium and Uranium Producers such as Cameco Corp. is one of growing optimism as there is an expectation of a further recovery in Uranium going forward. In looking at the Candlestick chart, we see that an important inflection point materialized back in late May when the shares broke out to a new high from its Ascending triangle pattern which started all the way back to the Summer of 2021. When the shares Ascending Triangle Pattern resolved itself to the upside at a price of $40.00, we saw that a new uptrend materialize which ultimately saw the shares reach its recent high of approximately $56.00 earlier last month. A minor pullback has materialized, seeing its shares finding some support at the $50.00 area. Resistance can be found at its recent high near $56.00 while support can be found at $50.00 and, below that, the $44.00 level.
In the attached Point and Figure Chart at a 1% scale, we see the shares had broken to the upside when they closed above the past resistance level of $40.00 back in June of this year.
Then we see a steady pattern of higher highs and higher lows up until last month when the shares ran out of steam at the $55.00 area. A pullback has materialized in the last month with a couple of columns of O’s materializing and the last column of O’s breaking down by one additional row, then turning back into a rising column of X’s, a classic Bull Trap Bottom.
We are quickly approaching near term resistance at a price of $54.60 with additional overhead resistance at its most recent high of $56.25. Support can be found at its 3-box reversal of $50.42 and below that, the $48.94 to $49.43 area. With an SMAX score of 6 out of 10, CCO.TO is showing new-term strength against most asset classes.
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