Uranium – This market is on fire

This is the first blog post that will be published in English. I have been at this blog for almost a year now and see that I have more international readers than Norwegian. Therefore I want to make it easier for most of you to read without Google Translate. First up is a short update on the Denison Mines Gamma Squeeze.

For the first update it is fitting to talk about the uranium markets. They are on fire at the moment. In light of this, I also see a lot of people trimming their positions. The stocks charts are stretched and the RSI levels are high along with other technical indicators. This can make anyone want to take some profits. We also have to remember that people also invest for different reasons. I am not to judge anyones decision to sell if they act according to their plan. I also do not know what these overbought levels on the RSI compares to in Bitcoin and other cryptocurrencies. From what I have seen in these markets anything can happen. I would kick myself if I sold out of a position and did not get back in. My goal for this bull market is to ride it to potentially financial freedom. Therefore I am not selling anything yet. The move in Denison Mines can blow off and we can fall 50 % down from here, but it can also continue climbing. Denison can even drag along other uranium companies with their move. They are putting the spotlight on uranium for other retail investors and make them look into the investment case for uranium.

The Reason why Denison Mines is having such a great run these last couple of days is said to be a Reddit group in the vein of the one for Gamestop run. This reddit group is trying to force a gamma squeeze on the Denison Mines. The speculators buy a lot of call options of the company’s underlying stock. The issuer of these options then need to buy some of these shares on the open market as collateral in case they have to deliver the shares in the option trade. As of now, we do not know if this group will be successful or not. I am not participating and am still sitting on my shares bought in 2019.

The thing for me is that I do not sell on price targets for the shares, at least this early in the bull market. Compared to other shares, Denison has not even gone 10X over its oversold bottom in March 2020. There are a lot of shares, like Encore Energy and Paladin that in the last year have gone over this. I am not going to let myself get carried away and will stay with the share if it goes down 50 % from here. I have this article as my inspiration and preparation for this bull market: Would You Have Made a Fortune in Uranium? There were some hard pullbacks in the last bull market and I am prepared for this.

Denison Mines 1 year return

I am trying to zoom out and not get caught in the day to day frenzy from the market. We can just go back to the start of 2020 to find the situation being completely different. At the start of the year my uranium portfolio struggled sideways and downwards from my entry in early 2019. It then dropped even more with everything else in March before it took off with increased spot price and mine closures. I did not have cash on the sidelines to buy in at the bottom. (Being honest, I do not know if I would have been able to buy any stocks at those levels, cash or no cash. Buying at the bottom is very hard to do mentally. Not selling was hard enough). After that the portfolio was in a sideways pattern well into fall. At much the same time, my precious metals portfolio was doing great. The precious metal shares held my portfolio up when it looked the darkest for my uranium shares. It kept me in the game and stopped me from doing something stupid like selling down in uranium. 

Now the tables have turned. Uranium is catching a bid and gold and silver are struggling. From what I see, this is also temporary. We are seeing the paper markets fighting the physical markets with real physical allocation increasing every day. March is a delivery month and a lot of the futures contracts want to hold for delivery. For anyone following this we know that this can be a very interesting time.

For me the plan going forward is to watch my gold and silver positions now and let uranium take care of itself.

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