The junior miners, commodity and precious metals sectors could be on the verge of a major bottom.
I know that is a contrarian opinion as the majority believes that the rally in precious metals, junior miners (NYSEARCA:GDXJ) and commodities (NYSEARCA:DBC) is just a short covering dead cat bounce. However, the technicals are showing the signs of a major bottom reversal in the junior gold miners etf (GDXJ) as I indicated in this August 3rd article.
Click on symbol to view chart.
On Friday July 24th, the GDXJ made a bullish engulfing reversal on major volume. Then eleven days later a major follow through occurred on high volume. The news that drove interest was China devaluing its currency. The mainstream media and majority of pundits were claiming currency wars were over as precious metals were discarded. I disagreed and maintained that we would see a bottom in our real assets.
Now this Yuan devaluation could start the next round of competitive currency devaluations and the beginning of inflation. The Fed may be reluctant to raise interest rates as the strong US dollar curbs growth and makes it more challenging for the US Government to pay back its record amount of debt. This may be the perfect storm for precious metals to once again take center stage and eventually breakthrough 2011 highs at $1900 USD.
Attention must also be paid to the uranium sector as Japan restarts nuclear reactors today. For years, the majority of pundits said nuclear is dead as Japan will never turn back on the reactors. I disagreed and knew that Japan can’t rely on imported fossil fuels if they want to compete in the global economy. This should push higher uranium mining stocks (URA) and some of our favorite junior miners.
Lots of M&A activity is taking place. Just look at Uranerz-Energy Fuels (UUUU) Merger, Denison (DNN) and Fission (FCUUF) arrangement and Uranium Resources (URRE) and Anatolia merger. The sector shows signs of getting leaner, meaner and ready to make a major run. Congrats to the patient long term investors who could see major gains over the next few years.
In my premium service I highlight some of these smaller stories with great potential. I have been blessed in 2014 during the bear market to identify the two best performers on the OTCQX in 2014.
I believe some of these links to recent news items and CEO interviews in gold and uranium should grab some attention as sentiment recovers.
Here are links to some of my featured companies right now which I own and are current website sponsors. I try to choose what I believe are the best situations for my subscribers.
Here are some of our top Uranium links.
Disclosure: I have a conflict of interest as I own these stocks and they are current website sponsors. I would benefit if the stock price rises.