Thread by @TennisonEddie

1/ It's interesting watching the discount to NAV change for $SPUT. Today spot price fell 2.59% and U.UN fell 2.34% but the discount to NAV fell from yesterday's 5.28% to 3.96% today at the close....with no pounds added.

2/ So...if pounds are added and spot price stays the same, that raises NAV for $SPUT

If the spot price rises and the pounds stays the same, that also raises NAV.

Obviously is both spot price and number of pounds rises together, that raises NAV more than either acting alone.

3/ Pounds in the trust never goes down, so there is never a similar additive factor to the downside. NAV only drops when spot price drops.

Discount to NAV would be maximized on a day when both pounds are added and spot goes up, while $SPUT price remains static or declines.

4/ But the way it really works is that $SPUT price tends to be dragged up by a rising spot price and/or new pounds being added to the trust.

Discount to NAV increases in when spot is static or falling, and when #uranium sector sentiment is low because of u equities falling.

5/ But..remember the additive effect on NAV when pounds and spot both rise together? What this means is that in a situation where falling spot price is expected to be quite transient (which I'd argue is now) then you can buy $SPUT anytime the share price drops and

6/ and you can reasonably expect NAV to take care of itself, and to rise quite rapidly when money flows back into $SPUT and spot rises too, on the next change in sentiment. So you can start to use conventional technical analysis as a guide here rather than ONLY using disc. to NAV

7/ It looks instructive here to me to look at Fib levels off the summer low, which is where the last $SPUT run started.

8/8/ We are now right at the 23.6 retracement level, and also look at the 38.2 % level. which has acted as both resistance and support several times. This is at $15.76 CAD. I would not be surprised to see us revisit this level, and if support does not hold tomorrow we will.jmho

2/ Since spot fell again and $SPUT bounced, it was just enough to bring it back above NAV again.Last dip in the discount to NAV only dropped to 5.28%. The trend is now for a smaller drop in discount every time SPUT falls.

3/ It makes me suspect that soon we will see the first major trend change since last fall. One where $SPUT might hold ABOVE spot as both start to trend up together, as happened briefly in the most bullish phase of the fall run-up. That's the bull case.

3/ The bear case, which isn't all that bearish in my view, is simply one more good dip that takes $SPUT down to the 38.2% retracement around $15.76 CAD. You can see this level has been a battleground this year, and the chart is very congested at this level.

4/ I'm holding out for this dip, which would be a buy zone for me. If $SPUT goes up this next week and clears the recent top at $17.93 CAD, I think the odds drop considerably for another dip.

5/ It looks to me like the only resistance above the 17.93 high would be roughly at $19 and at $20 CAD. Blue skies above that.