URRE Update

The last time we looked at URRE ( a long term long position), it was up +17% at the time of the update last Wednesday, I gave several stops with the 60 min and daily Trend Channel as well as tighter trading stops if that's what you'd like to use, I prefer this as a longer term position though because of this simple chart.

 Daily chart seems to show a large double base.

Even the 60 min chart suggests that a consolidation/pullback should have little problem making a new leg higher.

 This is what URRE looked like as of Friday coming out of a symmetrical triangle.

Wednesday it was up +9.75 on the close, then +5.26 and Friday 6.56, but if you look at the daily chart above, Friday's candle is a short term exhaustion candle and known reversal called a "Hanging man", it looks like a hammer, but it's at the wrong end of a trend. Today's candle thus far is the confirmation candle for that reversal candle, a "Bearish Engulfing candle".

It's important to remember that the candles by themselves don't give time or targets, they just say "This trend ha run out of fuel" so sometimes they can be 1-day reversals, sometimes major reversals, it really depends on the rest of the charts and URRE looks to be in good shape.

In fact, I'd set price alerts if you are interested in URRE long as a new position or add to (long) as a pullback will give you a better price and lower risk, the other charts already show a high probability of it making a new leg higher after a consolidation. There's nothing really interesting about this scenario, it's typical (except the percentage move, but that's a function of the lower priced volatility/cap).

 The 10 min chart positive before the breakout and negative in to the highs, but nothing terrible, not a deep leading negative.

 This is my X-Over Screen to weed out false crossovers or whiplashes which includes a custom indicator (yellow) in the middle with a moving average (blue), when all 3 fire the same buy or sell signal, you have a signal which recently went long.

After years of using this I've found that it's highly probable that the first and often second pullback in a new trend is to the yellow 10-day price moving average, which should be a bit higher by the time price gets there. Often it's a quick tag of the 10-day and back to the trend (up), sometimes they consolidate along the 10-day. Subsequent pullbacks are deeper to the blue 22-day moving average.

To the left you can see a sell/short signal confirmed.

 The 60 min trend Channel would stop out at $3.23, I usually like to use the close, but it's a matter of common sense and probabilities and they are high that after 3 strong days like that, URRE consolidates the gains, which is also healthy for the longer term trend. so the stock doesn't get frothy and too far removed from its support.

The daily Stop Channel was at $2.52 on Wednesday, now $2.72 on a closing basis so far today, but it should keep moving up to lock in more gains, this is the beauty of my channel which won an award, it tracks each stock's individual character and has a margin in which behavior is considered, "Out of character" and that's when stops pop up like the downtrend to the left stopping out at the yellow arrow.

The channel also does a FANTASTIC job at allowing stocks enough room to consolidate without stopping them out, unless the consolidation is way out of character for the stock, this is nothing like a pre-set envelope channel that has no relation to a stock's character or Bollinger Bands that can deviate in wild swings, this is specifically for long term trends.

I feel comfortable with URRE and will hold, I'll set price alerts for where I think the 10-day will be in a couple of days and we'll look at it again, if there's accumulation in to the pullback, then it's a healthy/constructive pullback, but I can tell you from what we already know, the probabilities are VERY high that it will be a constructive pullback. This allows you to pick up the position on the cheap and a stop can be placed under the 22 or at the Trend Channel, depending on how it acts and the market, but I'd put it on your radar if you like trending positions and set some price alerts.