Cameco Plunges 4.54% to $70.47 as Technical Indicators Flash Bearish Signals

Cameco experienced significant bearish pressure in the most recent session, dropping 4.54% to close at $70.47, marking a two-day cumulative decline of 8.27%. This accelerated selling activity suggests deteriorating market sentiment in the short term, warranting a multi-indicator technical assessment.
Candlestick Theory
Recent sessions show consecutive bearish candles with substantial bodies, confirming strong selling momentum. The most notable pattern emerged around $80 in late July, where a shooting star formation (August 1) preceded the current downtrend. Critical support now converges near the $67-$69 zone, corresponding to June lows, while overhead resistance crystallizes around the $73-75 region established through multiple failed rebounds in early August. These price extremes represent significant psychological barriers requiring substantial volume to breach.
Moving Average Theory
The 50-day MA ($67.50) maintains an upward slope, suggesting intermediate bullishness, but current price action below the 100-day MA ($69.80) signals medium-term vulnerability. The most concerning development is the impending death cross as the 50-day converges toward the 200-day MA ($63.40) from above. While the long-term 200-day trend remains positive, sustained trading below the 100-day MA may trigger accelerated selling from momentum-based participants.
MACD & KDJ Indicators
MACD lines exhibit a bearish crossover below the zero line with expanding histogram negativity, confirming growing downward momentum. Concurrently, KDJ readings dive at 25/18/40 – deeply oversold but without bullish divergence. This tandem configuration indicates immediate downward pressure remains dominant. Any near-term bounce attempts would require bullish MACD crossovers combined with KDJ exiting oversold territory to suggest credible reversal potential.
Bollinger Bands
The bands recently expanded sharply (8% width increase since August 15) as price pierced the lower band, signaling elevated volatility and continuation downside risk. Though this penetration often precedes technical rebounds, the absence of immediate mean-reversion suggests weakness exceeds typical oversold conditions. A sustained move back inside the bands would signal stabilization, while continued lower-band hugging may indicate persistent distribution.
Volume-Price Relationship
Recent declines show concerning volume patterns: the 8.27% two-day drop occurred on 12.26 million shares traded – 44% above the 20-day average – confirming strong conviction behind the selloff. Contrastingly, the preceding August 18 rebound registered only 2.66 million shares, revealing weak bullish participation. This volume disparity confirms downtrend validity and suggests rallies remain susceptible to failure without notable accumulation volume.
Relative Strength Index (RSI)
The 14-day RSI plunged to 32, nearing oversold territory but lacking bullish divergence. This reading mirrors late June conditions preceding a meaningful rebound, though oversold thresholds may be less reliable given the broader sector volatility. Traders should note RSI may linger near oversold levels during strong trends, requiring confirmation from other indicators for reversal signals.
Fibonacci Retracement
Applying Fib levels to the June 10 low ($51.10) and July 31 high ($80.06) reveals critical thresholds. The recent breakdown below the 38.2% retracement ($69.20) accelerated selling, with the 50% level near $65.50 becoming the next logical downside target. Confluent support emerges at the 61.8% retracement ($61.90), aligning with the 200-day moving average. Any recovery attempt must reclaim the 38.2% level to suggest trend resumption potential.
Confluence & Divergence Observations
Critical confluence appears at $67-$69, where the 38.2% Fibonacci level, June swing highs, and 50-day moving average converge to form a major support cluster. Bearish divergence emerged in late July as price achieved higher highs ($80.06) while RSI posted lower highs. Most notably, the MACD/KDJ momentum decay diverged negatively with price during July’s highs, correctly foreshadowing the current correction. The lack of bullish divergences currently suggests caution toward immediate reversal prospects.
This technical mosaic depicts Cameco in a corrective phase following rejection at multi-year resistance. While oversold conditions may prompt technical bounces near the $67-$69 support confluence, sustained recovery requires reconquering the $73-$75 resistance zone with confirming volume and momentum indicator improvements.