Saturday, February 17, 2007

Uranium Index, Week 5

Things just got a little more serious....

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This week, the news that SXR Uranium One (TSX: SXR) announcing its intention to acquire UrAsia Energy (TSXV: UUU) really lit a fire on all of the uranium stocks (except for the helpless elephant Cameco, whose problems at Cigar Lake continue to weigh heavily on the stock). I don't quite remember all the other uranium companies running as much when Energy Metals Corp (NYSE: EMU) announced its intent to acquire High Plains Uranium. Anyways, the current rumour is that UrAsia Energy may receive a competing offer from one of the big guys like Rio or BHP, or even Cameco (to compensate for its delayed productions problems at Cigar Lake). Rumours do not need to be true for the stock to go up, so, UUU is definitely the one to watch next week.
This current running of the bulls in the Uranium sector reminds me a bit of the dot.bomb bubble days from back in 2000, or the panic run of WTIC up to $80/barrel last year. Really makes the trading very pleasant, although I am going to have to seriously consider holding these companies longer than the few days that I have been holding them. The whole uranium sector has been in a buying panic for much of this week ever since SXR's announcement of the acquisition. I've tried adding the 2 additional uranium companies (20 total now) in an attempt to decrease each component's influence on the index, but that has only served to highlight the strength of this sector even more. This is the 5th consecutive week that the index closed up for the week (5 white candles).

+24% in 5 weeks? This is probably the best portfolio/index that i have ever run, and I keep saying this, but I really need to start looking at how to take advantage of this sector run-up, since nothing this good ever lasts for that long.

Index Value: 24,917.42
Best Performers: LAM, UMN
Worst Performers: CXX, CCO


Week 4: +10.5%

Since inception: +24.58%

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