URRE Follow Up

URRE is a trade we've been watching develop, I've written about it many times, the last entry trade was on the 24th of June @ $1.62 for a current gain of about 11%, which is a nice target for a swing trade, although URRE may very well have bigger plans. Actually we had an earlier trade on 6/17, so if you took that trade, you'd have a gain of around 20%, which is double the average swing trade target.

 On the daily hart, URRE has a nice positive divergence, it's been in a downtrend as one of the few underperforming commodities during the commodity run, for nearly 6 months. Note RSI is positive at the lows of URRE's price. I'm looking at URRE in this post as more of a swing trade, but this is one to keep on the long term bullish watchlist. What we've seen over the last several weeks could very well be part of a much bigger base forming; there are solid fundamental reasons concerning supply and demand that underpin the bullish slant on the trade.

 Here's my crossover screen to help prevent false crossovers or whipsaws, the most dangerous part of any crossover based trading system. For a long position to be triggered, the 10-day yellow price moving average must cross the blue 22 day average. In the middle window, the yellow custom indicator must crossover its blue 22 bar moving average and finally RSI must be positive (above 50). In white you an see the long trade signaled, in red, several failed price crossovers that the system picked up and would have prevented you from entering at those whipsaws.

 Typically, once there's a long position triggered, the first pullback will usually be to the yellow 10-day moving average and after further legs up after a pullback, subsequent pullbacks tend to be deeper and target the 22 day blue moving average. URRE is starting to look a little overbought.

Here's a trailing intraday stop that has held the trend well, it's a 50 bar sma on a 60 min chart. The average will continue to rise, but a break of the average would signal a stop out of the current swing long trade.

Finally I want to take URRE as an example of the Swing method I've been discussing lately, as few trends will go straight up and discerning what moves are important and what are noise is important. It's always easy to see in hindsight, but consider our first trade entry in white, the next day we had a slightly lower close, while it may not have been hugely disturbing as it was a slightly lower close, you may have felt this is not a good way to start off the trade. The days marked with yellow arrows are considered noise and the days in green are days posting higher highs/higher lows as well as a higher close. The day of the large green volume spike was another follow up post and trade entry. The following day closed significantly lower. Emotionally, this would have been a very bad feeling to enter the trade one day and the next be sitting on a decent loss, but still the next day down was noise in the trend and not very relevant. We saw two more days of noise in a consolidation before we made our next significant move with a higher high and low (green arrow). Since then URRE has made another 3 trending days of higher highs/lows and higher closes.


This is just an example to help you understand the trend, while in retrospect the trend looks pretty good, sometimes out emotions can be jolted pretty hard on a 1-day move against our position, especially after just opening the position. Hopefully this will help you take a longer view of a trend and help you understand what the trend actually is. Just like with a map, you can't get to where you are going until you first understand where you are.