The Global X Uranium ETF (NYSEArca: URA) is down 3% in the past week, but that could be just the pullback investors are waiting for to get involved with the previously high-flying ETF.
“After touching the 20-day EMA and reversing, our current long position in URA stalled out near the swing high the very next day,” notes Deron Wagner of Morpheus Trading Group. “When a swing trade stalls out at or near a prior swing high it usually signals that the price action will need more time to digest the last move up. But as long as $URA continues to set higher lows, any short-term consolidation should lead to a continuation breakout within the next two to three weeks.”
Wagner said investors can look to get involved with URA if the ETF pulls back to the $17.50 area. It closed at $18.05 Monday, gaining 1.2% on volume that was less than half the daily average.
URA has surged 20.4% this year as Japan has announced plans to return to using nuclear power. Last month, Japanese Prime Minister Shinzo Abe’s administration detailed plans of the new Basic Energy Plan, which highlights efforts to increase nuclear power usage. [Uranium ETF Bounces Back]
The energy plan outlines steps to restart reactors that were closed following the Fukushima Daiichi nuclear plant disaster in 2011 and overturns a promise by the previous administration to phase out the country’s nuclear reactors.