Cameco Corp. (CCJ) Forms a Possible Top
Share
Cameco Corp. engages in the provision of uranium. The company operates through the following segments: Uranium and Fuel Services. The Uranium segment involves the exploration for, mining, milling, purchase and sale of uranium concentrate.
Take a look at the 1-year chart of Cameco Corp. (NYSE: CCJ) below with the added notations…
Chart of CCJ provided by TradingView
Over the past four months, CCJ has created a key level of support at the $20 (green) mark. That line would also be the “neckline” for the stock’s possible head and shoulders (H&S) reversal pattern. Above the neckline you can see the H&S pattern (red) has been completed.
Confirmation of the H&S would occur if CCJ were to break the support, and lower prices would be expected from there.
The Tale of the Tape: CCJ has formed a head & shoulders pattern. A long trade could be made at $20 with a stop placed below that level, but the bearish pattern implies a short trade to be entered on a break below that level instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Good luck!
Christian Tharp, CMT
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