Goin' Nuclear...Maybe (CCJ, SGR)

I'm constantly looking for ways to hedge against the government policies/regulations/interventions these days. My first attempt was positions in gold (via DGP) and silver (via SLV). They didn't pan out too well (although I didn't lose money) until a month ago or so (now they are sporting decent gains). My second attempt has been much better - a position in a foreign industrial material company (MTL, Russian iron ore); the stock is up 150% in 2 months.

Now these are all hedges that bearish-leaning investors have talked about: gold, silver, commodities, emerging markets where there's still growth potential. Is there anywhere else that are being overlooked so far and therefore less crowded?

I think there may be a potential in nuclear power generation sector. (At this point, I'm just thinking aloud.) The new administration in the US is pushing for clean energy ever harder and putting in regulations and restrictions on carbon emission. At some point (if not now already), it will be impossible to meet the new criteria without resorting to the ultimate clean energy, nuclear.

(It's possible that I wasn't much aware but lots of other people have already noticed and invested.)

Here are two candidates among several other: Cameco Corp (CCJ) and Shaw Group (SGR). Cameco is a Canadian company, one of the largest uranium miners and refiners in the world. Shaw Group does nuclear power plant design and construction.

CCJ's 2-year weekly chart shows a significant ramp-up that started in late April-early May. They reported the earning on May 1 with positive outlook. Without knowing about the earning report, it looked to be a double-bottom breakout although the breakout volume is not there on the weekly chart. However, Chaikin Money Flow (CMF) indicates that the stock is being accumulated for the first time since July last year.

As with many other stocks and indices that I watch, CCJ seems to be approaching a critical juncture - make or break. As you can see in the chart, the stock is heading toward a point where a long-term support line from October 2007 meets the descending trend line from October 2008. I'll be watching how the stock behaves when it hits that point.

As for the nuclear construction company, I'm still investigating. Shaw Group is one of them.