A relative strength uptrend in Cameco Corp. (CCO.TO) shares which had started back in May ended unceremoniously on Friday when an uptrend line was snapped and the shares crashed out of the green zone into the Yellow Neutral Zone. With the shares dropping 7.7%, CCO.TO fell 10 positions to 18th place.
A major potential Head and Shoulders peak which has been forming since last October appears to be getting close to completion. Twice this summer, the shares have faltered short of $35.00 resistance, forming a right shoulder and on Friday, they broke down below $30.00 once again, indicating increased selling pressure.
The rising neckline of the pattern indicates potential support near $27.50. A failure there would complete the pattern and signal the start of a new downtrend. Should that occur, next potential downside support appears near the $25.00 round number, followed by previous lows near $23.00 and $20.00. Initial resistance drops to the $30.00 round number.
Since peaking back in April, Cameco Corp. (CCO.TO) shares have been under distribution. For the second time this month, a rebound attempt has faltered at a lower high short of $35.00 resistance, an in the process has established a new downtrend line. The shares have gone into retreat once again and triggered a bearish High Pole Warning on a 2% chart, along with a bearish Double Bottom breakdown on a 1% chart.
Initial downside support appears near $26.60 which held successfully through several tests but would be particularly devastating if it were to fail with next support after that at a previous low near $23.20. Initial rebound resistance appears near $31.85 based on a 3-box reversal.
With a bullish SMAX score of 9, CCO.TO is still exhibiting strength against the asset classes for the moment.
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