The momentum indications are slowly improving, though uranium has failed to make a move beyond nearby resistance. Meanwhile, Cameco shares have gained ground on an early opening after bouncing off support of $85-$87 price levels.
The value of uranium at press time, according to Trading Economics, is $85.75 per pound, up $0.05, or 0.06%. Since late April, the price seems to hold near this level while constantly going back and forth between $84 and $87.
At the beginning of the presented one-year timeframe, uranium value was close to $71 before jumping to $75 in September. It later reached $83 in October but has retreated toward $76 due to selling pressure.
A larger recovery started in December, pushing uranium past the $85 level in January before February brought a temporary surge to over $100 and a subsequent quick drop back below $90.
Uranium has been confined within a more narrow range since that move. The support levels seem to be within the $84-$85 range, where multiple tests by buyers have succeeded in stopping the price decline.
Nearby resistance lies within the $86.50-$87 range, a sustained move above which would direct the price towards $89-$90 levels. Any failure to hold $84 will invite another wave of selling toward $82. Lower support lies within the $80 area that once fueled the 2025 advance.
Uranium futures, per TradingView, show the value of uranium at $85.75, up by $0.10 or 0.12%. The price action during the day remained flat, though the momentum indication is turning positive in July.
The RSI is sitting at 54.80 and the moving average at 50.31. This means that recent gains have surpassed recent losses. It is nowhere near the RSI 70 level of overbought, showing that the market conditions are far from being pushed to the extreme that occurred during the February rapid advance.
The MACD line stays flat at 0.04, 0.05, and 0.01, showing slow directional strength, but the histogram has slightly turned to the positive side, and the fast line is holding above the recently established lows.
This pattern coincides with the gradual increase in the price of uranium from the lower boundaries of the established range. The price action also shows that since April, sharp down moves have stopped occurring, whereas they appeared during February and March.
The focus of T-Bird has been on Cameco as an indicator of the equity uranium market. His chart of CCJ shows opening at $90.35 and closing around $91.56 with a 3.25% gain. The shares have gapped above the previous trading range as they bounced off the support line at $85-$87.
As per T-Bird, gap trading ahead of a directional move tends to precede a stronger impulsive move. The market seasonality of uranium is also perceived to be reversing sooner this year. While cautiously optimistic, this is the initial upswing after the recent persistent decline.
Cameco’s RSI managed to rise above the oversold 30 level to 40, although it is still below the 50 line of the neutral position. MACD remains negative, but the narrowing histogram indicates that the bearish momentum might be fading.
Resistance seems to sit at $92-$94 and $99-$100, although multiple moving averages continue to hold above the current value. Support is now observed in the gap area ($89), then $85-$87, and a break below this will trigger another test of the June lows.
