Cameco Plunges 7.06% After 10.51% Rally As Bearish Engulfing Pattern Emerges

Cameco declined 7.06% in the latest session, closing at 80.23 after trading between 79.71 and 86.33 on above-average volume of 7.85 million shares. This follows a 10.51% surge in the prior session, creating a volatile two-bar pattern. Our technical assessment examines key indicators across the specified framework.
Candlestick Theory
The September 15-16 sessions formed a bearish engulfing pattern near the $86.33 resistance level, which has capped price advances twice since late August. This pattern suggests exhaustion after the 10.51% rally. Immediate support emerges at $79.71 (September 16 low), aligning with the July swing high. A breakdown below this level may expose the $75.50-$76.50 consolidation zone from early September.
Moving Average Theory
The 50-day SMA ($73.82) maintains an upward trajectory above the flattening 100-day SMA ($70.15) and rising 200-day SMA ($62.40), preserving the longer-term bullish structure. However, the abrupt reversal from near the 50-day SMA ($86.33 peak versus $73.82 average) indicates persistent overhead pressure. Sustained trade below the 50-day average would signal deterioration in the intermediate trend.
MACD & KDJ Indicators
MACD lines crossed bearish below the signal line on September 16, with the histogram deepening into negative territory. This aligns with KDJ readings where the K-line (34) crossed below the D-line (42) from overbought territory (K-line previously at 82). This momentum shift suggests waning buying pressure, though neither oscillator yet signals oversold conditions.
Bollinger Bands
Volatility expanded sharply during the September 15-16 swing, with price rejecting the upper band ($86.33) before closing near the lower band ($80.23). Bandwidth remains at elevated levels compared to early September's contraction phase, indicating ongoing directional instability. Price now tests the midline ($81.50), with a breakdown potentially accelerating toward the $77 lower band.
Volume-Price Relationship
The 7.85 million shares traded during the 7.06% decline substantially exceeded the 30-day average volume, confirming bearish conviction. Notably, distribution days have outnumbered accumulation by 3:1 over the past month, with September 15's 10.51% rally on 10.2 million shares showing less volume commitment than the subsequent selloff. This volume asymmetry undermines rally sustainability.
Relative Strength Index (RSI)
The 14-day RSI (47) crossed below its signal line from neutral territory after failing to breach 60 during the September 15 rally. While not oversold, the loss of upward momentum from August's high (RSI 73) creates a bearish divergence with price's higher September peak. This warns of weakening buying interest despite nominal new highs.
Fibonacci Retracement
Using the June low ($63.83) and September high ($86.33), key retracement levels cluster at $78.03 (38.2%) and $75.08 (50%). The September 16 close at $80.23 sits just above the 23.6% level ($79.14). Confluence exists near $75.00 where the 50% retracement aligns with the 100-day SMA and August consolidation base, creating a high-probability support zone if the current pullback extends.
Confluence & Divergence Notes
Multiple indicators agree on resistance at $86.33 (Bollinger Band rejection, candlestick pattern, and RSI divergence). The $75.00-$76.50 zone shows high confluence (Fibonacci 50%, volume node, and prior consolidation). Primary divergence appears between momentum oscillators (bearish MACD/KDJ crosses) and the still-bullish moving average structure, suggesting a corrective phase within the broader uptrend. Volume patterns notably diverge from price action, with stronger participation during declines than rallies since mid-August.