As Long as the Market is Exuberant, Let's Learn to Love the Bomb

Amazon made waves (no pun intended) this morning with a headline flashing pre-market that the iconic, innovative firm plans to invest $500 million to develop small modular reactors. 

As you might imagine, the entire nuclear and uranium space shot up on the news and is still right near session highs virtually across the board as I write this. We have been playing SMR long inside the service for a few weeks now, but have also mentioned on this main page the likes of URA (the uranium sector ETF), UUUU UEC CCJ DNN, among other plays.

All of those names are enjoying impressive momentum today, and could easily squeeze higher yet since a fair amount of these plays have a high short position, meaning there is a chance shorts are dramatically offsides here and could stage a gamma squeeze like the meme stocks have over the years if enough longs force the issue buying out of the money calls.

But putting that to one side, uranium has clearly been one of the more out of favor sectors for years. Both retail and institutions are laughably underweight the group, as is the case with most commodities and commodity stocks nowadays--Except the difference with uranium and nuclear is that there is now clear political will to invest and use the energy, on top of heavyweights like Amazon getting involved.

One of our key themes with Members of late has been that "commodities" ought not equate solely to crude oil, and yet that is precisely what most equity investors do. in other words, if someone mentions "commodities," they may initially look at Chevron or Exxon, or perhaps only at them. 

However, that seems like a mistake in this market, with crude slithering around aimlessly all the while the likes of uranium are suddenly improving on a daily basis with government and private sector interest, to boot. 

As for actionable long ideas not yet extended in the group, keep an eye on NNE (daily chart, below) and URG.