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Stay Long With This Uranium Co.
Contributed Research

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Technical Analyst Clive Maund shares why he believes Atha Energy Corp. is a Buy.

Uranium stock Atha Energy Corp (SASKF:OTCMKTS;SASK:CA) has done well since we bought it in early and mid-December, as it has since broken out and risen steeply to form the right side of a Cup pattern, as we can see on its latest 4-month chart below.

This rally brought it up swiftly to resistance at the September – October highs, where it has stalled out partly due to the big uranium stocks like Cameco Corp. (CCO:TSX; CCJ:NYSE) correcting back following strong runs.

So the question for us now is whether "that's it" and it will now react back much further as it did following the September runup or whether it will marshall itself to bust through the resistance at the September – October highs.

Although not the easiest call to make at this juncture, I believe it will do the latter for the following reasons.

In the first place, it looks like the larger uranium stocks will soon embark on another strong upleg following a normal correction within an ongoing strong bullmarket. Fundamentally, the uranium price bottomed in November 2016, and it has been trending strongly higher ever since, with many countries planning to ramp up electricity production from nuclear.

The problem for North America and the U.S. in particular is that almost all uranium has to be sourced from countries in Asia with which it is not exactly on friendly terms, to put it mildly. Enter Atha, which holds the largest cumulative exploration package in the Athabasca Basin, the world's most prominent basin for uranium discoveries, with 3.4 million acres which it plans to drill for the 1st time this year.

So fundamentally, the outlook for the company is bright. Technically, if we look at the 11-month chart below, we see that the price is now better positioned to break above the key resistance in the CA$1.22 – CA$1.30 zone than it was in September – October. Even though the attack on this resistance back then failed to break above it, what it definitely did do was drain off a considerable amount of the overhanging supply at this level, dating back to the extensive trading in this area from April to early July of last year.

In addition, the price has just completed marking out a bullish Cup pattern. So, with the larger stocks in the sector looking set to advance anew after a period of correction, this is a good time for Atha to "go for it" and break above this resistance, which would mark the start of a bullmarket in the stock.

So, if we refer back to the 4-month chart again, we see that there has been a very marked dropoff in volume as the price has reacted over the past week. This is bullish and implies that rather than the price forming another intermediate top as in September - October, it is instead completing a bull Flag whose prospective boundaries have been drawn on the chart. If this interpretation is correct, then it should take off higher again very soon and break above the key resistance.

We, therefore, stay long, and this is regarded as another good point to Buy or add to positions.

Atha Energy Corp.'s website.

Atha Energy Corp. closed at CA$1.15, $0.85 on January 5, 2024.

Originally posted on on January 8, 2024 EST.

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Important Disclosures:

  1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of [Cameco Corp.].
  2. [Clive Maund]: I determined which companies would be included in this article based on my research and understanding of the sector.
  3. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
  4.  This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

For additional disclosures, please click here. Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

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