Cameco Surges 4.81% as Technical Indicators Signal Bullish Momentum Amid Key Support Rebound

Cameco (CCJ) has surged 4.81% in the most recent session, extending its two-day rally by 9.96%. This sharp reversal from recent volatility suggests a potential short-term bullish momentum, particularly as the stock has rebounded from a key support level around $79.44 (November 21 close) to reclaim its 200-day moving average (~$83.30). The price action over the past two weeks reflects a consolidation pattern, with the recent candlestick formation resembling a "Bullish Engulfing" structure on November 25, where the upper wick is minimal, indicating strong buying pressure.
Candlestick Theory
The recent price action reveals a series of large bullish candles with narrowing ranges, suggesting a potential exhaustion of selling pressure. Key support levels are evident at $79.44 (November 21 close) and $77.70 (November 20 low), while resistance is clustered around $83.48 (November 24 high) and $87.67 (November 25 high). A breakout above $87.67 may trigger a retest of the 200-day MA, whereas a failure to hold $79.44 could lead to a retest of the 52-week low near $50.85. The "Bullish Engulfing" pattern on November 25, combined with a "Higher Low-Higher High" structure, suggests a short-term bullish bias, though a bearish divergence in volume during the prior week (November 17–21) warrants caution.
Moving Average Theory
The 50-day MA (~$85.00) currently sits above the 100-day (~$84.00) and 200-day (~$83.30) averages, forming a "Golden Cross" configuration that supports a bullish trend. The stock’s current price of $87.35 is above all three moving averages, indicating short-term momentum. However, the 50-day MA has begun to flatten, suggesting potential exhaustion in the upward trend. A sustained close below the 200-day MA would signal a shift in medium-term sentiment, while a breakout above the 50-day MA could accelerate the rally. The 200-day MA also aligns with a prior price floor (~$83.30), reinforcing its significance.
MACD & KDJ Indicators
The MACD histogram has shown a narrowing contraction over the past five days, indicating waning momentum, but the MACD line (12-day EMA minus 26-day EMA) remains above the signal line, supporting a bullish bias. The KDJ (Stochastic) indicator has entered overbought territory (K=85, D=78), suggesting a potential pullback is imminent. A divergence between the KDJ’s overbought condition and the MACD’s weakening momentum raises caution about a near-term reversal. Traders may watch for a bearish crossover in KDJ or a MACD histogram expansion below zero as potential sell signals.
Bollinger Bands
Bollinger Bands have expanded significantly over the past week, reflecting heightened volatility. The current price of $87.35 sits near the upper band, indicating a potential overbought condition. A break above the upper band could extend the rally, but a reversion to the 20-day moving average (~$85.50) is probable. The band’s width (currently 5.2%) suggests that a contraction phase may follow, which could precede a directional breakout.
Volume-Price Relationship
Volume has surged on the recent rally, with the November 25 session recording 5.8 million shares traded—a 40% increase from the prior day. This validates the strength of the move, as rising volume typically confirms trend sustainability. However, volume during the November 17–21 correction was also elevated, indicating potential distribution by short-term traders. A sustained decline in volume during the next rally may signal waning conviction.
Relative Strength Index (RSI)
The 14-day RSI stands at 68, approaching overbought territory (70 threshold). While this does not confirm an immediate reversal, it suggests caution. A close above 70 would extend the overbought condition, which could persist in a strong uptrend, but a failure to break 70 may indicate a pullback. The RSI has formed a bullish "Bullish Divergence" with price over the past two weeks, where price lows have been higher than RSI lows, reinforcing the likelihood of continued upward momentum.
Fibonacci Retracement
Applying Fibonacci levels to the recent $77.70–$96.95 range (October 28–November 13), key retracement levels are $87.44 (61.8%), $85.68 (50%), and $83.44 (38.2%). The current price of $87.35 is near the 61.8% level, suggesting a potential consolidation phase before a retest of the 50% level ($85.68). A break above $87.44 could target the 78.6% level ($90.74), while a failure to hold $85.68 may trigger a retest of the 38.2% level.
Confluence and Divergences
The confluence of a bullish candlestick pattern, a Golden Cross in moving averages, and RSI divergence suggests a high-probability short-term continuation of the rally. However, divergences between the MACD’s weakening momentum and KDJ’s overbought condition highlight the risk of a near-term pullback. Traders should monitor the 50-day MA ($85.00) and $87.44 Fibonacci level as critical junctures for trend validation.
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