Cameco Drops 3.9% As Bearish Technicals Signal Further Downside Risk

Cameco (CCJ) declined 3.91% in the most recent session to close at $73.82, ending near the day's low of $73.29 after failing to sustain momentum above the $76 resistance level. This price action sets the context for the following technical assessment using multiple indicators.
Candlestick Theory
Recent candlesticks show a bearish engulfing pattern formed on August 19th, as the session’s red body completely covered the prior green candle’s body, signaling potential reversal pressure after a minor recovery attempt. Key resistance is now evident near $76.82 (August 18th high), while critical support resides at $72.93 (August 1st swing low and psychological level). The $73.29–$72.93 zone represents a decisive battleground; sustained breaks below may accelerate selling.
Moving Average Theory
The 50-day moving average (approximately $70.50) currently provides dynamic support below the current price. However, the 100-day MA (near $67.80) and 200-day MA (around $60.40) slope upward, confirming the longer-term bullish trend. Notably, the 50-day MA is converging toward the 100-day MA—a potential bearish signal if a death cross materializes. Price trading between the 50-day and shorter-term averages reflects near-term consolidation within the broader uptrend.
MACD & KDJ Indicators
MACD lines recently generated a bearish crossover below the zero line, with the histogram expanding negatively—signaling strengthening downward momentum. Concurrently, KDJ’s K-line (currently near 35) crossed below its D-line from overbought territory (>80) last week. While KDJ approaches oversold levels (<30 would indicate extreme conditions), MACD’s acceleration to the downside suggests further weakness is probable before stabilization. This alignment indicates momentum favors sellers in the immediate term.
Bollinger Bands
Bollinger Bands have contracted notably over the past two weeks, indicating declining volatility and a potential energy buildup for a breakout. Price recently pierced the lower band ($73.00 area) after hovering near the middle band (20-day SMA, approx. $75.50). This violation, if sustained beyond the current session, may trigger further downside targeting the next support tier. Band expansion would likely follow, confirming directional conviction.
Volume-Price Relationship
The August 19th decline occurred on significantly elevated volume (4.16M shares vs. 2.65M prior), validating bearish conviction. Earlier rallies (e.g., the June 26th surge on 7.82M shares) similarly used volume confirmation, but recent upswings lacked commensurate volume—a divergence warning of weak buying interest. This volume asymmetry strengthens the bearish case for near-term downside continuation unless accumulation reemerges.
Relative Strength Index (RSI)
The 14-day RSI (approximately 42) has exited neutral territory (50) and trends downward after failing to reach overbought (>70) during July’s peak. While not yet oversold (<30), its momentum divergence versus price in late July—higher highs in RSI amid lower highs in price—foreshadowed the current pullback. Current readings imply room for further downside before reaching extremes, though oversold conditions would warrant monitoring for exhaustion.
Fibonacci Retracement
Applying Fibonacci to the dominant uptrend from May’s $51.18 low to July’s $80.32 high shows the pullback breached the 38.2% retracement ($71.25). The 50% level ($68.00) now serves as the next significant support confluence, aligning with the 100-day MA and May–June consolidation highs. A rebound would need to reclaim $74.50 (23.6% retracement) to suggest bearish invalidation.
Confluence and Divergence Observations
Strong confluence exists at $73.00–$72.93, where Bollinger’s lower band, horizontal support, and the 38.2% Fibonacci level converge—failure here may trigger accelerated selling toward $68.00 (50% Fibonacci + 100-day MA). Divergence appears between medium-term moving averages (bullish) and momentum oscillators (bearish), reflecting unresolved tension between trend persistence and short-term exhaustion. Volume and candlestick patterns currently bolster bearish near-term bias. The breach of key Fibonacci and moving average supports suggests a retest of lower levels is probable unless buyers defend $72.93 decisively.