Uranium Energy Corp stock price jumps 8%: Is UEC about to fly?

Summary:

This year, the Uranium Energy Corp stock price has struggled to live up to the hype. Despite several pops above $3.50, the stock always reverses lower.

This year, the Uranium Energy Corp stock price has struggled to live up to the hype. Despite several pops above $3.50, the stock always reverses lower. However, after yesterday’s rally, the bulls may be wondering if, this time around, UEC has enough power to do the job.

Joe Biden’s green initiatives helped Unranium Energy Corp (NYSE: UEC), the US-based uranium mining and exploration firm to rise almost 350% between October and March. However, since then, the stock has trended broadly lower, albeit in a volatile fashion. And because of this, UEC has considerably pared the earlier gains and now showing an increase of 20% year-to-date. Notably, 13% of that has come in the last two day. As a result Uranium Energy Corp stock has broken out of a downtrend and is once again testing the 200-day moving average. And if UEC can repeat the performance of the last two days, it will clear not just the 200-day, but the 50 and 100 to boot. Furthemore the last time this happened was Novemenber, before the stock embarked on an incredible bull run.

UEC Price Forecast

The daily chart shows UEC has cleared the resistance of a descending trend line at $2.07. Furthermore, once the resistance was hurdled, the buying accellerated the price north towards the 200 DMA at $2.25. However, the buying momentum failed to carry the price over the indicator, and UEC eventually settled at $2.21 (+7.80%).

In close proximity to the 200-day, the 50 DMA at $2.34 and the 100 at $2.44 contribute to the considerable overhead resistance. However, if Uranium Energy Corp stock surpasses these, $2.66, should follow. And above $2.66, there is a case to be made for an asault at March’s $3.67, 9-year high.

Of course, until resistance is uncapped, the stock remains vulnerable. Initial support is found at the former trend resistance of $2.07. And should that fail, Thursday’s $1.96 low is all that stands in the way of a much deeper decline.

For now, the signs are encouraging, and become even more so above $2.44. However, jumping the gun is dangerous and therefore, traders may wish to see if UEC continues higher in the next few days before diving in.