Buy Alert: November 20, 2014
Buy Alert: November 20, 2014
Option Strategy:
Buy Cameco Corporation (CCJ) March 20, 2015 $20.00 calls for $1.50 or better.
Commodity Outlook: Uranium
Something very interesting is happening in the uranium market…
After years of dormancy, Japan is getting ready to restart two nuclear reactors. As you may know, the country’s nuclear power fleet has been shut down ever since a tragic earthquake wreaked havoc a few years ago.
But now, Japan’s economic needs are overcoming the environmental concerns.
Word of the restart is igniting a rally in Uranium futures. The commodity has jumped from $28 to $44 in just the past few weeks. As more of Japan’s reactors come on line in 2015 it’s very likely uranium jumps to even higher ground.
Here’s a company that will benefit enormously from higher uranium…
Resource Company: Cameco Corporation (CCJ)
CCJ is one of the world’s largest uranium producers. The company has mining assets in Canada, the US, and Kazakhstan. All told, CCJ provides around 15% of world production.
But that’s not all…
CCJ is one of four companies in the Western world that processes uranium. In case you’re unaware, uranium must be converted from ore coming out of the ground to commercially usable Uranium hexafluoride.
CCJ’s operations span the entire uranium fuel cycle. And that’s why this company will see dramatic benefits from rising uranium prices.
So here’s what we’ll do…
Buy the CCJ March 20, 2015 $20.00 calls for $1.50 or better.
The current bid/ask spread for this contract is $1.20/$1.30
Do not pay more than $1.50 per contract!
Our official entry price for performance tracking is $1.30. Your price may be higher or lower.
Exit Strategy:
Remember, we want CCJ to trade higher. Our first profit target is $22.00, while our second target is at $24.00.
The risk control price for this trade is $17.49. If CCJ trades below that level, conservative investors should consider closing this trade to preserve capital.
Category: Commodity Trading
