URRE Update

The last Update for URRE was Tuesday (Oct. 15th), the gist was URRE was consolidating its gains, I personally already have a large position long in URRE (equity), but if I didn't, I'd be hard pressed not to open at least some long exposure there.

We opened a long position in URRE October 8th which by looking at the price chart alone on that day, very few people would have considered it a long, but it had a very nice reversal process (visible on intraday charts) and some screaming positive divergences. The next morning URRE was at a +20% gain with no leverage in the first couple of hours since we opened the position.

I still like URRE a lot and that's the reason I decided to hold it. I want to update URRE because I think it is getting close to making another move, I'm not seeing imminent signals as in I'd open call positions immediately, but there are a lot of good looking charts holding together and this one has a trailing stop using the Trend Channel.

 The daily X-Over Screen is just a hair away from a confirmed long signal, RSI is already there, it's just our moving averages and custom indicator and they are very close. There will be opportunities to add on pullbacks or even start a new position if you want to wait.

The same 60 min chart that was screaming on October 8th is still screaming and has added to the divegrence during this consolidation.

In fact, many of you old timers know we have been watching URRE with interest for a while as a primary uptrend candidate which would be nice to have during a bear market, this 3-day chart of 3C shows what is likely a very large base, you may recall the shape of the rounding/reversal process on October 8th on intraday charts, it looked a lot like this one on a 3-day chart. Interesting how the market is so fractal.

The 30 min chart was in line with the downtrend until it went leading positive, all of that accumulation was BEFORE URRE made the move the next day.

I said in the last update that I'd consider adding to URRE "IF" it made a head fake move below $2.50, support is at $2.52, I believe the red arrow was a shakeout/head fake move as it gapped to a new high and quickly reversed to the lows of the day on the close, that's what head fake moves do. If we were to get a downside head fake as well, we'd have a complete clearing of the baffles, a Crazy Ivan shakeout and some pretty serious institutional longs, I'd expect a move to a new breakout right after a head fake break under $2.50 as these head fake moves often are excellent timing markers and they give the asset a big boost through things like short squeezes (although that's not very probable here because of the price).

I used two trailing stops using my Trend Channel which adjusts to the stock, not to whatever period you enter like an envelope channel. Right now the 1-day stop is $2.44 which is too tight for me considering we are not at stage 2 yet and volatility is still kind, the 2-day is at $2.37 which is more reasonable, these stops are on a closing basis, not intraday.

I like this 4 hour stop even more, it is at $2.30 and gives plenty of room for a head fake move.

I did some quick math, if you are abiding by the 2% Rule for Risk management, with a $10k portfolio you could take on 1175 shares, this would give you a position that is 32% of your portfolio which for me is too large, I prefer around 15%, but the point is, even at this wide of a stop, you can still have a 2% of portfolio or less, loss if you get stopped out and still have a reasonable position size.