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Triple-Digits in 4 Months from a Brand-New Bull Market

By Matt Badiali, editor, S&A Resource Report
Wednesday, October 20, 2010

Uranium is the newest bull market in the commodity space.
 
The bull case for uranium – the chief fuel for nuclear reactors – is simple: Emerging Asian nations, particularly China and India, are Westernizing. Their populations want air conditioning, refrigerators, iPods, and YouTube. That means electricity. These countries will go on a building spree of nuclear power plants to meet the exploding demand for electricity.
 
But there is a real lack of new, near-term uranium production. That means supply won't increase as much as demand... and uranium prices will rise.
 
I haven't told you anything new... yet.
 
The factors I just outlined produced a more than 10-fold rise in the uranium price from 2003 to 2007. The end of that rally was fueled by speculators, who helped produce a subsequent crash. This crash, along with the economic crisis of 2008-2009, hammered uranium prices and the companies associated with it.
 
But that didn't change the situation in China and India one bit. And here's where it gets interesting...
 
Starting in about June, the price of uranium made a major breakout... It just recently hit a high for the year.
 
We've been seeing some major moves from uranium miners as well. Below is a chart of Cameco, the world's second-largest uranium producer...
 
 
Cameco is up 31% since June 1. And it's not the only uranium producer in a huge bull rally...
 
Company
Symbol
Performance Since June 1
Cameco
CCJ
31%
Denison
DNN
55%
Uranium Resources
URRE
198%
Uranium Energy Corp
UEC
62%
Uranerz Energy
URZ
30%
UR-Energy
URG
39%
 
As you can see, these companies performed unbelievably well over the last four and a half months. And I expect more big things for this group.
 
There will be several companies that "tack a zero" onto their market value from this trend... and onto your investment, too. You should add some uranium to your portfolio to take advantage of this emerging bull market.
 
Good investing,
 
Matt Badiali




Further Reading:

"This new Asian nuclear boom is expected to be the largest period of nuclear power growth since OPEC's oil embargo," Matt says. "At its peak... the nuclear industry started up a new reactor every 15 days. By 2015, we could see a new reactor coming online every five days." Read more here: An Extraordinary Fact You Didn't Know About China.
 
If history is any indication, uranium could see gains of up to 277% in 18 months. And hoarding from India and China should keep the downside limited. Get the full story here: The Next Great Chinese Commodity Hoarding Story.

In The Daily Crux
Market Notes
U.S. dollar jumps to highest level in two weeks.
 
Precious metals take a break… gold down almost 4% from last week's highs, silver down 5%.
 
Gold miners' uptrend under pressure… GDX and GDXJ pull back 7% in less than a week after huge three-month rally.
 
Earnings today... Wells Fargo (banking), Abbott (health care), Altria (Marlboros), Boeing (aerospace), eBay (online shopping).
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1178.17 +1.1% +8.0%
Oil 35.59 +2.8% -11.9%
Gold 131.32 +0.9% +27.0%
Silver 23.33 +2.2% +35.6%
US-Dollar 78.36 +1.7% +3.8%
Euro 1.40 +1.7% -6.5%
Volatility 19.79 -4.1% -5.3%
Gold Stocks 504.79 +1.9% +15.2%
10-Year Yield 2.47 +0.0% -26.1%

World ETFs
Symbol Price
Change
52-Wk
USA 117.87 +1.0% +7.9%
Canada 28.81 +1.4% +9.8%
Russia 19.80 +0.9% -1.7%
India 38.40 +1.8% +23.3%
Israel 16.45 +0.3% +14.6%
Japan 10.20 +0.8% +2.7%
Singapore 13.71 +1.1% +24.5%
Taiwan 13.33 +2.2% +7.3%
S. Korea 53.98 +2.3% +16.7%
S. Africa 68.30 +0.9% +19.9%
China 46.18 +2.1% +4.5%
Lat.America 52.10 +1.6% +12.8%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 117.54 +1.8% -8.8%
Big Pharma 66.09 +0.4% -2.3%
Internet 65.77 +0.6% +26.0%
Semis 13.55 +1.4% +10.0%
Utilities 32.22 +0.8% +8.1%
Defense 17.72 +1.3% +8.6%
Nanotech 9.49 +1.3% -9.9%
Alt. Energy 10.02 +0.9% -8.3%
Water 17.45 +2.4% +5.8%
Insurance 15.85 +1.3% +13.1%
Biotech 19.98 +0.4% +20.2%
Retail 17.83 +1.1% +12.4%
Software 22.93 +0.9% +16.6%
Big Tech 51.19 +0.7% +18.4%
Construction 12.22 +1.5% +0.4%
Media 12.86 +1.4% +16.3%
Consumer Svcs 62.58 +1.2% +15.4%
Financials 53.32 +1.1% -0.3%
Health Care 64.26 +0.7% +7.3%
Industrials 59.55 +1.3% +15.2%
Basic Mat 68.23 +2.3% +17.6%
Real Estate 56.14 +2.0% +33.3%
Transportation 85.69 +2.2% +17.9%
Telecom 21.93 +1.4% +19.9%