Australian Uranium Bounces Hard

Yesterday, I sent my Red-Hot Asian Tiger subscribers a couple of charts showing why I thought that Uranium stocks and Australian markets were due for a bounce. This is an update of one of those charts, Paladin ...
There are a lot of lines and action on this chart, but don't worry, I'll help you decipher it.

The Green Line is the long-term uptrend. That is broken by recent action. Then again, it was broken back in February, too, and it shrugged it off.

The shorter-term uptrend (the Blue Line) is still holding. In fact, it intersects with a 25% Fibonacci retracement. Fib retracements are common retracements in bull markets, and many technical analysts use them as support.

Sure enough, you can see that Paladin came down to touch support at the 25% retracement and its short-term uptrend and seems to have found its footing here.

Today's candlesitck is an "outside reversal" day -- it completely engulfs the previous day's bearish candlestick. This is a bullish short-term signal.

The green line, or longterm uptrend, is now overhead resistance. Then again, it wasn't much overhead resistance the last time this happened in February. Give it a week and we'll see.

So what if this bullish reversal is a fakeout? We could see a sell-off as deep as the 50% retracement. That would be scary. But man, if that happens again, that would be the buying opportunity of the year.

Check out my new gold and energy blog at MoneyAndMarkets.com