Skyharbour Resources (TSX-V: SYH), a uranium exploration company with prime assets in the Athabasca Basin, is poised to capitalize on the anticipated resurgence in the uranium market. The company’s extensive portfolio of uranium exploration projects and strategic joint ventures with industry leaders make it a wise investment for those seeking to benefit from the rising demand for nuclear power. With eighteen projects covering over 460,000 hectares of mineral claims, Skyharbour is well-positioned to become a major player in the uranium mining industry.
The Company announced last month that its partner company, Basin Uranium Corp., intersected significant uranium mineralization from the three-hole phase 2 drill program at its Mann Lake project.
Recently, partner Azincourt Energy (AAZ.V) announced it has completed the 2023 exploration program at the East Preston Uranium Project.
In my most recent technical piece on Skyharbour Resources, I outlined a plan to play a breakout retest. Let me refresh readers memories:
Above was the Skyharbour chart from March 8th 2023. The stock had made a major breakout closing above $0.425 and triggering a breakout run up to $0.525. A pullback then played out which is entirely normal in breakout plays. Price tends to pullback to RETEST the breakout zone before continuing higher. Skyharbour Resources saw a bid at the retest zone near the end of February 2023 and was testing it a second time.
The advice I gave to readers was to wait for a large green or large wick candle indicating that the buyers were stepping in. I also mentioned the wedge, or flag pattern Skyharbour was in. However the trigger would be a break and close above this wedge.
Here is how the stock chart looks today:
The wedge did not trigger, and the support did not hold.
This was largely due to the fall in uranium which I will speak about below.
Currently, Skyharbour Resources is in a range phase. The stock is contained between support at $0.345 and resistance at $0.40. We can expect buyers to enter at support, and sellers to sell at resistance. To trigger the next leg of a move, a breakout of the range is required, hence why ranges are seen as the consolidation phase of market structure.
But if you look to the left, you will see how important this support level has been for Skyharbour in the recent past. The stock has seen bids and moves from this support multiple times. I understand the saying is “past performance is no guarantee of future results”, but from a technical analysis standpoint, when we have multiple moves from this zone, and price respects it many times (3 or more), it is a significant zone that traders and investors will have marked and act on.
What would get Skyharbour moving? A fundamental catalyst this year. For more info, check out Gaalen’s in depth piece. Or, a sympathy play on uranium rising.
For the past few weeks, I have outlined how there were big drops in energy, including uranium. Oil prices have bounced well off those lows thanks to the OPEC+ surprise, but uranium remains near the recent move lows.
I use the Global X Uranium ETF (URA) and the Sprott Physical Uranium Trust (U.UN) as my proxies for the uranium price. The technicals tell me where prices could be going. Now we all understand the long term bullish fundamental case for uranium and nuclear energy, but the technicals on both of these charts are currently showing a downtrend. This provides an opportunity for long term uranium bulls to acquire, or initiate new uranium positions, at good prices.
A positive for uranium bulls is that both URA and U.UN are now developing a range… just like Skyharbour. But as mentioned earlier, both remain in a downtrend with lower highs and lower lows. For URA, a close above $21.50 gets us out of the downtrend. A close above $20.30 would add some fuel to the idea that we can get back above $21.50. For U.UN, a close back above $16.50 is what gets us out of the current downtrend, with a close above the $15.80 zone increasing the probabilities of a trend reversal.
In summary, Skyharbour Resources is a wise investment for those looking to gain exposure to uranium exploration. With a diverse portfolio of prime assets in the Athabasca Basin, strategic joint ventures, and a project generator strategy, the company is well-positioned to benefit from the improving uranium market fundamentals. The long term outlook on uranium remains bullish based on the fundamentals. The recent weakness in uranium could be about to end, and a new trend would see uranium stocks breakout from their ranges.