Interactive Investor

Does the future look like Yellow Cake?

26th July 2022 07:31

Alistair Strang from Trends and Targets

A lot of people believe uranium is the future of power generation. If it is, Yellow Cake may be well placed. Independent analyst Alistair Strang tells us what his charts say.

It appears Yellow Cake Ordinary Shares (LSE:YCA) are about as near to uranium enjoying a dedicated index as possible. To quote from the company website: “Yellow Cake is a uranium focused company offering direct exposure to the spot uranium price without exploration, development, mining or processing risk".

The company owns and stores uranium oxide in various locations in both Canada and France.

Barely a month goes by without someone enquiring about uranium, invariably discussing North American based companies, as increasingly it seems many investors are becoming confident that nuclear shall become the greenest route to the future.

Personally, an expectation the new Rolls-Royce Holdings (LSE:RR.) micro reactors shall provide a welcome boost to that company's share price, is the reason we perhaps watch its share too closely, suspecting at some point it shall boost upward, regardless of whatever is going on with the aviation industry.

Yellow Cake has certainly enjoyed quite strong and steady movement since the inevitable pandemic low back in 2020. Through thick and thin, the share price has paid enormous respect to the Red uptrend on the chart below.

Past performance is not a guide to future performance.

The implication of this slavish devotion suggests a slight threat of any future weakness below 313p triggering reversal to an initial 287p with secondary, if broken, at 259p and hopefully a bounce.

In many ways, the share price dare not close a session below 259p as, longer term, we currently cannot calculate any sort of reliable bottom.

On a more positive note, above the immediate Blue downtrend, presently just 261p, works out with some useful potentials as it risks triggering recovery to an initial 373p with secondary, if exceeded, at a longer-term 409p and some very possible hesitation.

With closure above 409p, we shall be required to revisit our tea leaves, thanks to some quite interesting long-term potentials.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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