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One earnings short-squeeze trade in the metal mining sector is
Uranium Energy(UEC), which is set to release numbers on Thursday before the market open. Uranium Energy is a natural resource exploration company engaged in the exploration of properties that may contain uranium minerals in U.S. There are currently no Wall Street estimates available for Uranium Energy for this quarter.
The uranium stocks as a group have been beaten down since the first quarter when the Japanese nuclear disaster hit. Despite that tragedy, there are still lots of uranium projects and nuclear power plants being built around the globe, since it's still considered to be one of the safest forms of energy. Since we have so much pessimism surrounding the group going into the quarter, we could see a decent pop in this stock if get any bullish news.
The current short interest as a percentage of the float for Uranium Energy is a rather large 13.4%. That means that out of the 67.02 million shares in the tradable float, 9.10 million are sold short by the bears. This is a pretty big short position on a stock that's currently trading below $5 a share and has a very low float.
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From a technical standpoint, the stock is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock recently broke below some big support at $2.50 a share and then hit a low of $2.20, before rebounding and now trading at around $2.85 a share. The stock is now quickly approaching its 50-day moving average of $3.06 a share ahead of the quarter.
If you're bullish on this stock, I would be a buyer after they report earnings once it trades back above that 50-day of $3.06 on big volume. Watch for volume that's tracking in close to or above its three-month average action of 651,600 shares. A
high-volume move above that level post-earnings should set this stock up for a re-test of some prior overhead resistance at around $3.50 to 4 a share. I would simply avoid this stock all together if it fails to move above that 50-day post earnings.
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