The presence of flat 200 day moving averages throughout many of the US Stock Market Indices and sectors, combined with a few other factors, is causing me to maintain a neutral / bearish stance toward equities for the time being. Luckily, as a technician I can take advantage of opportunities in other non-correlated liquid assets.
That being said, the Global X Funds (NYSEARCA: URA) looks good on the long side for a number of reasons.
Here are a few:
- The Uranium ETF (NYSE: URA), despite being an equity ETF, has no correlation to the S&P 500 over the past month, quarter, and year. This is great given my view on equities at the moment.
- My structural downside price targets for the Uranium ETF have been met while momentum diverged positively on multiple timeframes, suggesting we may be due for some mean reversion.
- The risk/reward ratio is high and the risk is well defined.
Overall this backdrop has the characteristics I look for in this type of environment, and given the lack of interest / buzz around this particular space, I think a sharp rally can develop if price action continues to improve.
From a structural perspective, there have been few things worse than URA these past few years. It is down roughly 90% off of its 2011 highs and needs to reverse split occasionally just to remain trading. With that being said, my structural downside target at the 261.8% extension of the January – May 2015 rally was met this past August. More recently, the Uranium ETF retested the year-to-date lows, momentum diverged positively, and ...
/www.benzinga.com/trading-ideas/long-ideas/15/12/6077797/3-reasons-the-uranium-etf-is-set-to-shine alt=3 Reasons The Uranium ETF Is Set To Shine>Full story available on Benzinga.com
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