Uranium Participation

02/12/07 09:23:56 AM

by Koos van der Merwe

Uranium Participation is an investment holding company that invests substantially all of its assets in uranium.

Security: UX
Position: Hold

The objective of the Uranium Participation Corp. is to provide an investment alternative for investors interested in holding uranium. Securities are listed and trade on the Toronto Stock Exchange and a net asset value is calculated and reported monthly.

FIGURE 1: URANIUM PARTICIPATION CORP., MONTHLY. Uranium Participation shows an Elliott wave formation.

Graphic provided by: AdvancedGET.

Figure 1, a monthly chart, and shows how the price moved from a low of $3.08 on September 29, 2000, to the present high of $14.87. The chart also suggests an Elliott wave account with a wave 3 completed and a wave 4 suggesting targets of 12.27 and 10.59. The relative strength index (RSI) is overbought but has not given a sell signal, so we could expect a further upside movement or a sideways movement until a more definite signal is given on a monthly scale. To resolve this, we turn to Figure 2, a weekly chart.

FIGURE 2: URANIUM PARTICIPATION CORP., WEEKLY. Uranium Participation shows triangular consolidation patterns and breakout levels.

Graphic provided by: AdvancedGET.

Figure 2 shows how the price rose on up bursts following a consolidation triangle or flag pattern. The present high suggests that one is due now. Once again the RSI is overbought, with a sell signal not given.

FIGURE 3: URANIUM PARTICIPATION, DAILY. This OmniTrrader chart shows buy and sell signals, with the present indicator being a buy and hold.

Graphic provided by: Omnitrader.

Finally, Figure 3, a daily chart, gave an RSI/stochastics buy signal on January 15, reinforced on January 19 by a Fisher moving average convergence/divergence (MACD) signal. No sell signal has been given and both indicators are positive.

Figure 3 suggests that if you are a holder of Uranium Participation, then continue to hold using a stop-loss signal to close the position. Should you wish to purchase the stock, weekly and monthly charts suggest that you wait for a price correction before buying.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.