A graphic from Cantor Fitzgerald Canada Research illustrates a growing uranium deficit over the next decade even under a US$40/lb U3O8 price scenario (current spot price is US$22.50/lb):
After beginning 2017 with a powerful rally the uranium exploration sector has spent the last couple of months drifting lower. Once again investors don't care much about uranium.
This has created an interesting situation for the premier uranium exploration stock, NexGen Energy (NXE.TO):
NXE.TO (Weekly)
2 1/2 months ago investors couldn't get enough of NexGen shares, now it seems like the opposite is true. NXE is near a crucial spot as price has come down to test an area of previous resistance.
While I am not a huge proponent of Elliott Wave Theory I placed Elliott Wave numbers on the above chart to highlight the 'potential' that exists for the current corrective wave to be the climax of wave 4. This theory would be nullified on a move below C$2.78 (the April 2016 high which marked the end of Wave 1) as wave 4 should not overlap wave 1. I would like to see a weekly close above C$3.25 to confirm that this 'corrective wave' has reached a conclusion.
This is an interesting moment for NXE as the company's fully diluted market cap flirts with the C$1 billion mark (345.5 million shares x C$2.90/share) which also happens to coincide with an important area of technical confluence. If Cantor's analysis proves to be correct I can envision NXE shares eventually reaching double-digit levels
Needless to say I like the risk/reward from current levels ($2.90) but alas I am biased; I own the stock and I have a wager with @Allan.
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