Another area getting attention along with the AI theme is uranium mining stocks and component-related companies to the nuclear industry.
Today’s feature focuses on the AI theme and seeks to address potential bubble fears that advisors may be fielding about the industry and holdings in their portfolio. Another area getting attention along with the AI theme is uranium mining stocks and component-related companies to the nuclear industry. Some readers may wonder, “How does uranium relate to the AI theme?” Recent rallies within uranium stocks have been driven by the perceived increase in demand for uranium due to the numerous announcements and plans from utility companies to build nuclear power plants and provide technology and other AI-related companies the needed power for data centers.
Among the ETFs to maintain exposure to companies related to uranium mining and nuclear components is the Global X Uranium ETF (URA). Along with broader U.S. equities, URA rallied from April through July before consolidating in August. Positive action resumed through September and October, leading the fund to its highest level since 2012 at $60. Action in the latter part of October and in November has brought the fund into the $40 range. With the volatile price action, URA’s magnitude of downside movement this month brought the market and peer relative strength charts into Os and back to RS sell signals for the first time since May of this year. The fund continues to maintain a positive trend on the default trend chart and Monday’s (11/24) action brought the chart back into Xs after holding support at $40. Along with support at $40, additional can be found at $39.50 before getting down to the bullish support line at $36.
Through Monday’s close, URA is still up more than 50% on a year-to-date basis and the ETF’s fund score maintains above the acceptable 3 threshold due to long-term trending and relative strength percentile rankings sustaining the score. Those who maintain exposure will monitor the fund score along with the default trend chart for further deterioration and violations of support. Users can set a price alert for $39, which would take out near-term support, and an activity alert for a change in trend.
