At the start of this week the shares of Uranium One Inc. (TSE:UUU), (PINK:SXRZF) touched the bottom on both the Canadian and the American markets. They noted their worst performance for a year. However, yesterday’s session gave some signs and hope that things are probably just beginning to change for the better. Meanwhile, the company has not released new announcements or developments.
On Monday, UUU slipped to its 52-week low of $2.08, while the next day it came back to $2.38, advancing by about 14%. What makes impression here are the large turnovers. Yesterday’s volume of 6M shares, for example, was twice the average. Not astonishingly so, the stock was among the most wanted and actively traded items on the Toronto Stock Exchange (TSE).
One can notice almost the same pattern on the American market, only the volumes there are much lower. SXRZF marked a low of $2.0115 on the first day of the week and climbed 14.7% up on Tuesday to close at $2.34. Presently, SXRZF is cruising around its June 2010 levels.
In the lack of other information, we might assume that shorters’ speculative activity is probably responsible for the recent behavior of the company’s shares. Speaking about the long-term performance of UUU, everyone can easily see the stock is not doing well. In early-May, the shares were traded for $4.25, while back in February they had hit the $7 price mark. Which means UUU has lost two-thirds of its value over the last eight months.
Still, there are several considerations that speak in favor of the future behavior of the shares. First, the price of uranium has begun to advance again reaching its July levels as you can see here. Secondly, the last two candlesticks on the TSE seem to have formed something similar to a Bullish Kicking Pattern. This is principally a sign that the market is moving upward but it needs confirmation.
So, have the shares of Uranium One really bounced off the bottom? Have they begun their recovery? There are people – participants in the stock forums’ discussions – who share an optimistic view about the future performance of the company’s stock. We shall see, for sure, whether they have their right.
