So I have started re-entering the uranium trade now that spot prices have come off and are much nearer long-term pricing. I'm entering cautiously, and have taken a 6% position size in YCA, where you can currently buy a lb of U for about $74, a dollar less than the end Feb long-term price. This is on top of my junior positions I maintained, so uranium is back to 14% of my portfolio. I believe sentiment has been mostly reset in the sector and now valuations are back in line with a more rational market. I see this very much as a trade now, with an expected life span of less than 12 months until the peak in prices. I think the risk/reward is now 25% downside from here (over a ~ year timeframe) with perhaps 75-100% upside.
From a technical perspective things are looking much healthier than they were when I exited. I think there is a chance of some modest further falls in price, as well as a few months of chop at these levels to gain support of the 200DMA, but there is a chance it'll rebound quickly. I will look to build on my 6% position in physical over the coming weeks should prices stabilise further.
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