One thing I have learned from years of trading and observing markets is that they always overreact.� Moves triggered by natural disasters and the resulting, but seldom realized, fear of utter catastrophe ALWAYS overshoot reality.� Remember, markets are driven by perception, not anything else.� The Japanese disaster is a classic example of this fact happening right now.� Anyone with the nerve to buy the sell-off in the Nikkei and S&P 500 has been rewarded handsomely over the last several days with a strong bounce back from the lows.
The fear in Japan is focused on its nuclear power industry.� The earthquake and the resulting tsunami damaged several plants causing radiation leaks.� This is turn, has resulted in worldwide nuclear plant shut downs over safety concerns.� As you can imagine, the closed nuclear plants has led to an extreme sell off in Uranium mining stocks.�� I believe this sell off is overreaching.� First, the worldwide nuclear plant shutdowns are temporary, other alternative energy sources are simply not enough to sustain the infrastructure at this time.�� Secondly, as was explained in the first paragraph, markets always overreact and this overreaction creates great opportunities in the opposite direction.
Here are 3 beat down Uranium stocks that are ready for a bounce:
Ur Energy (Amex: URG)
Uranerz Energy (Amex: URZ)
Uranium Energy Corp (Amex: UEC)
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