There is a lot to like with this stock based on both its fundamentals, but especially its technical picture. It is in a stellar uptrend with plenty of support and is not overbought at all. Let’s take a deeper look at what is driving the share price of Denison Mines Corp. (DNN).
According to Yahoo! Finance, the company engages in the exploration, development, mining, and milling of uranium primarily in the United States and Canada. It also produces vanadium as a co-product from its mines located in Colorado and Utah; and recycles uranium-bearing waste materials, as well as gold. As you can see it has its hands in much of the commodity space.
Bullish Basing
This chart grabbed my attention immediately due to its unfettered uptrend as well as its healthy basing pattern in the middle. Stocks need periods of consolidation or basing in order to refuel and set up a launching pad for its next breakout. This base becomes solid support when it breaks out.
Also notice that there are three well-definied breakouts since early November that all occurred on strong volume. I love the fact that the 50-day moving average has acted as support the entire way up with the exception of one minor breach that didn’t last long. I expect some more basing action north of $4 with that level acting as support before the next upside breakout.
Fundamentals
This is still a stock that is very much under the radar as evidenced by only one analyst covering it. It is considered a play on uranium which is starting to garner a lot of attention by investors. Uranium is becoming a sought after source of alternative energy and Denison will surely benefit from that trend. With the uranium market on the upswing, look for Denison to devote more of its attention to exploration, especially abroad.
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