Uranium: A Hot Button Issue
Source: SeekingAlpha (2/26/07)
Where uranium stock investing was just beginning to attract mainstream attention in 2006, scores of analysts and investors alike have jumped on its bandwagon this year.
A number of observations worth noting include: A broad market correction beginning May 2006 in both American and Canadian exchanges stalled momentum as speculative money went out of uranium;
Whereas Cameco was fairly resilient during this time, the uranium explorer Energy Metals experienced a much more severe pullback.
A dramatic turnaround occurred when Cameco announced the flooding of Cigar Lake on October 23rd. In a month my subscriber rate doubled from 300 to 600, with the steepness of the slope correlated to the price action of Energy Metals and inversely correlated with Cameco's stock.
After the announcement, there seems to be a period of "consolidation" wherein the market tried to digest the possibility that the mine that was to supply 10% of the world's uranium in the near future could be out commission for quite some time.