Thursday, February 17, 2011

The Case for Explosive Price Growth in Uranium - and the Best ETF to Play

The breakout in uranium - and uranium miners - continues, as Global X Uranium ETF URA powers out to new highs:

URA uranium price chart 2011
It is an all-out bull market in "the other yellow metal." (Source:

Last month we broke down the supply and demand fundamentals for uranium, and concluded that things looked pretty promising.

URA was a new kid on the scene at the time - but appeared to be a reasonable proxy for playing this radioactive bull market:
URA just began trading in early November, so we have a limited sample of historical results. But so far, the ETF has trended up, in tandem with uranium's spot price, as expected. With its not-unreasonable 0.69 percent management expense, I see no reason offhand why it shouldn't serve as a reasonable proxy for the price action of uranium stocks at large.
And good old Cameco - which makes up a sizable portion of URA - is on the move too, running out to three-year highs.
Cameco price breakout

Multi-year highs in energy should be bought, everywhere and always.  So, I will look to pick up some URA 
for my portfolio later this week.

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