DNN / DML.TO Denison Mines Uranium Stock Surges On High Volume

by Olivier on September 27, 2010

Today’s portfolio addition is DNN / DML.TO Denison Mines a Uranium producer with decent exploration potential. Its Vanadium potential is starting to garner some interest as well. In any case, today’s volume is impressive to say the least. We might have witnessed the first bullish white candle of a thrusting move to the upside. If that’s the case the stop loss I placed slightly below today’s low shouldn’t get hit.

The best stop losses are:

  • located as close as possible to your entry point
  • unlikely to get hit if one’s analysis proves correct

A stop loss giving the stock more room could be placed slightly below 1.50, the low of the most recent bullish consolidation pattern. As I see a potential runaway move that started today I decide to go for a more aggressive stop loss. Let’s see what happens.

DNN DML.TO Denison Mines Uranium Stock Explorer Producer Technical Analyiss Price Chart Volume

Up-to-date DNN / DML.TO Denison Mines chart on my public list.

I have written about a Potential Uranium Turnaround in the past. I have also written about what I am looking for in order to build up positions in the Uranium sector. I already tried to position accordingly when I traded KIV.V Kivalliq Energy a while back. I might still be too early but the sector is starting to build up pressure. The U.TO Uranium Participation chart is starting to look much better. Lots of Uranium stocks are starting to break out and volume is increasing when the stocks move to the upside.

WLC.V – Western Lithium USA although not part of the newly listed Lithium ETF would have offered a decent entry around the 1.00 level. It has now clearly broken its downtrend. Right now the Rare Earth Elements are on fire and quite a few gold and silver miners have had incredible runs. There is no way I am going to chase these moves. The key to long-term survival in the markets is to initiate positions where you can control your risk and set sound stop losses. The best way to do this when you are trading strong stocks on the move is to buy them when they start breaking out of a pattern that offers decent pattern pressure. GDXJ – Market Vectors Gold Miners ETF, and SIL – Market Vectors Silver Miners ETF are great proxies for rather aggressive mining stocks don’t offer that kind of pressure right now. It looks like the miners need to consolidate and pull back a bit from these levels. Then they would set up again and offer great trading entries.

From Denison Mines’ website:

Denison Mines Corp. (TSX: DML) (NYSE AMEX: DNN) is a diversified, growth-oriented, intermediate uranium producer with three active mines in the United States. Denison’s assets include an interest in two uranium mills in North America, with its 100% ownership of the White Mesa mill in Utah and its 22.5% ownership of the McClean Lake mill in Saskatchewan. Both mills are fully permitted. Denison also has other mines and projects on stand-by in Canada and the U.S. Denison’s 2009 production from its two mills was 1.4 million pounds U3O8 and 0.5 million pounds of vanadium. 2010 production is estimated to be 1.6 million pounds U3O8 and 2.8 million pounds of vanadium. Denison enjoys a global portfolio of world-class exploration projects in close proximity to the company’s mill in the Athabasca Basin in Saskatchewan, including the Wheeler River project where Denison announced the new Phoenix discovery in 2008. Denison also has exploration and development properties in Mongolia and Zambia which will provide future production in two to three years. Denison is the manager of Uranium Participation Corporation (TSX:U), a publicly traded company which invests in uranium in concentrates and uranium hexafluoride. Denison is also engaged in mine decommissioning and environmental services through its Denison Environmental Services (DES) division.

The best traders have no ego. You have to swallow your pride and get out of the losses. – Tom Baldwin

My public list with all my charts can be viewed here:

Buenas noches!

Previous post:

Next post: