From the Desk of Ian Culley @IanCulley
Metal and mining stocks are hanging tough.
Sure, miners aren’t flashing an overwhelming number of new highs, but they’re also not registering an alarming number of new lows.
That’s impressive, especially considering Copper’s epic false start.
While many precious and base metal stocks consolidate, let’s review the next group of mining names before they rip…
Check out the Junior Uranium Miners ETF $URNJ versus the Uranium Miners ETF $URNM:
Despite the significant overlap between these two ETFs, I view a breakout in the URNJ-to-URNM ratio as a clear risk-on signal (much like the relative strength displayed by junior gold miners).
The top four URNJ holdings – accounting for approximately 60% of the ETF – also belong to URNM. In comparison, those same four stocks combine for just 28% of URNM.
URNM also includes the $24B uranium bellwether Cameco Corp. $CCJ (a 17% weighting) and the Sprott Physical Uranium Trust (an 11% weighting).
Those differences are enough for me.
URNJ is stair-stepping higher, providing an excellent vehicle for expressing a bullish Uranium thesis:
Notice how the junior miners have respected our extension levels during the rally. If and when URNJ breaks above 31.50, I like it long toward 42.50.
But remember, we can’t take a long position until it posts a daily close above our risk level.
In today’s Commodity Trade of the Week, I’ll outline our risk levels for the top four components of the Junior Uranium Miners ETF…
COT Heatmap Highlights
- Commercials are approaching their largest net-long position for sugar in three years.
- Commercial short positioning for silver is hovering just above a new three-year record.
- Commercial hedgers’ short exposure to the 30-year T-bond is registering a new three-year extreme.
Click here to download the All Star Charts COT Heatmap.
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