Weekly Update: Nuclear Stock Poised to Breakout
Good evening, and welcome to this week’s edition of Stealth Trades!
I apologize for not getting this update out on Friday like usual. I took my kids to Disney World for a short vacation and did not get back until late Sunday night.
It was an exhausting three days of humid mid-90-degree heat. But the kids loved it. Especially my daughter, Georgia, who got the full princess treatment (see below).
But while I was gone, nuclear stocks continued their dominance.
As of today, the nuclear sector is the top performer over the last 1, 2, 3 and 6-month periods. Its leadership in this market could not be clearer.
And while the entire market made a strong move off the April lows, this area is red hot.
Here’s what the top names in the space have done over that period.
I have 25% of my retirement account allocated to NLR – the VanEck Uranium and Nuclear ETF.
Buying leading groups in the early stages of a bull market is one of the most consistent strategies for delivering big long-term gains. I also have a large chunk in QTUM which is the quantum computing ETF.
Nuclear is an exciting sector. Up until two years ago, these stocks had been dormant for more than two decades.
But investors are starting to see the writing on the wall…
America has an energy crisis that, so far, has not been solved. Solar, wind, and other alternative sources have been tried, but none delivered any real results.
Nuclear, however, is clean, renewable, and safe. It could deliver endless power through both large power stations and also small modular reactors.
Given the big outperformance over the last two months, a lot of the top stocks in this group are fairly extended. They could keep running, but they are also at risk of a steep pullback.
But one name looks primed…
Below is a chart of Nano Nuclear Energy, ticker symbol NNE.
I have drawn in yellow the shallowing base breakout structure. Notice how pullbacks have shallowed from left to right – each dropping less than the one before.
This is a sign that supply is being absorbed, and the stock is becoming harder to buy which is exactly what we look for in a breakout move.
NNE is pushing through the $34 resistance area on high volume, and if history is any indication, should push to new highs soon.
We saw a similar setup in NNE last year that delivered a 181% gain over the next three months (see image below).
And while there are no guarantees that this will happen again, breakout trades in leading groups at the early stages of a bull market are something I will never pass up.
Best wishes for your trading,
