NexGen Energy (NXE.TO)

On uranium, once you get to a $100 million market cap, you had better have a mine. As a speculator in exploration plays, you’d like it to have a $10-$20 million market cap. To take on that amount of risk, you have to double or triple your money.

It has been brilliant. Its discoveries of Uranium below the water have been quite phenomenal. The price is justified and they keep reporting brilliant results. It will keep going.

It blew through the 50 and 200 day moving averages. It went parabolic. Sooner or later those movements tend to have some give back and perhaps that is happening now. It went up too far too quickly. He would hold it, but not take a new position. It will carry on after it pulls back.

Technically it looks great. Probably a little early for him to be looking at this from a fundamental basis. They’ve done some drilling and have had fantastic numbers, numbers that blow away most of the competition who are producing in Canada. Thinks this will get taken out at some point in time. As the drilling comes, you will probably continue to see the stock move higher.

Uranium stocks in general in the last few weeks are starting to show some signs of outperformance. This stock should pretty well track what Global X Uranium (URA-N) does. Chart shows a very strong upward trend and is outperforming the market.

Energy tends to have a period of seasonal strength from January all the way through to May, benefiting from the run-up to the summer driving season. He has been speculating that you should see the peak in oil inventories within the next month. The chart shows a parabolic run from December at about $.56 to about $2. This is a substantial run in a short period of time. You now want to see this consolidate a little.

This thing has gone absolutely parabolic. There was consolidation in the middle of last year, followed by a major uptick. Because the chart shows the stock has gone up at a very extreme angle, he can assure you that the stock has been overbought. Expects the stock is ready for a bit of a pullback.

Had a huge discovery last week. Likes the stock a lot. Very cheap. Some of the smartest money in commodities owns this. There is a lot of upside. Clearly it is a take out candidate because they have a very, very attractive deposit.

Has a pretty good valuation at this point. They are now going to have to go through the infill drilling resource definition stage. Doesn’t know how much super upside there is, but when you look at all the other juniors that are taking a crack at it, you have a model. There is an institutional appetite for a high great discovery in the Athabascan Basin.

A fantastic discovery. They just put out a resource of 200 million pounds at about 2.5%. Within that, there is a high grade core of 120 million pounds of uranium. That 120 million pounds is the bulk of it. It is currently defined by 7 drill holes. When you get a deposit that great, it is going to take a lot more infill drilling to bring it up to “measured and indicated”. A great deposit, great discovery.

You have to have the patience to wait through the exploration. The deposit won’t be developed soon, but it has the ability to be huge. Over time there can be very high rewards.

Have made one good discovery after another. He doesn’t have a solid resource number yet, but it looks like it could be one of those 50 to 100 million pounds’ resource situations. He also owns Fission Uranium (FCU-T), which is next door and has also had spectacular results. Once you have 100 million of resource in the ground, the issue is what do you do with it. These 2 small companies are clearly not going to be able to develop them on their own. Wait for a better uranium cycle so that the big guys can be planning for the future.

This has broken out to the upside after a long battle of getting through. Usually $1 stocks are not his forte as to technical analysis, but using technicals on this stock, it needs to get through $1. It has broken through after trying 5 times. However, the word energy is what scares him.

A lot of indicators are saying this is not overextended. Because this stock is smaller, it can change really quickly and technicals almost don’t matter. Chart shows a nice long upward trend, and if they can get above the current price, we are probably looking at some pretty good upside. $0.70 is a place where he would be concerned that it is probably going to come back down to the $0.45 range.

It is bullish even though the sector is not doing that well. It is driven by geological results. Until Uranium gets over $40 he would not go into it.