HardAssetsInvestor

Written by Brett Owens  |

January 31, 2011

How To Play The Uranium Breakout

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With uranium on a tear, what's the best way to get your portfolio some radioactive exposure?

It's a bull market in uranium—again!

Uranium's price was "in the tank" for the longest time, thanks to the massive supply provided by retired Cold War nuclear weapons. That supply started to exhaust early in the last decade, which prompted a uranium moonshot (see chart below).

Like most commodity superfast rallies, this one ended in tears. But uranium has since risen from its radioactive ashes—after forming a "higher low—and recently broke out to a two-year high:

URANIUM PRICE
Feb 2, 1996 - Jan 21, 2011

Breakouts always catch our eye here at HAI because commodity markets have a tendency to rise much higher and farther than anyone think—which can be very profitable for investors like us.

Should this uranium breakout be bought? And if so, how can you best integrate it in your portfolio?

Higher Demand, Less Cheap Supply

Like crude oil, there's plenty of uranium available to satisfy global demand—if you're willing to pay up, that is. Because like crude, much of the "cheap" uranium, has already been extracted from the earth.

In his recent column for Growth Stock Wire, energy expert Matt Badiali analyzed the costs associated with extracting uranium:

Source: Growth Stock Wire