I hate to sound like a broken record but the bull market in uranium stocks has stampeded ahead since I wrote about them on December 15, 2006. As of the close yesterday, the 81 stocks in our Uranium Industry Group in VectorVest Canada were up an average of 36.5% since 12/15/06 for an average annualized rate of return of 106.7%. (Incidentally, we now have 101 stocks listed in our Uranium Industry Group) And the game is still in the early innings.

I first brought the uranium situation to your attention on August 20, 2004 when I cited Cameco, CCJ, as a logical "long-term play." Cameco is up 324% since then, but I must confess I sold it last year when the company ran into some problems. It's soaring right now, however. I don't know exactly why, but I believe they will solve their problems and be a leader in the boom that lies ahead. And there will be a further boom in uranium stocks even though the price of uranium ore has sky-rocketed over the last few years. Countries around the world are planning to build nuclear power plants and they're all going to need uranium. Even now the demand is 50% more than the currently active mines can supply. In fairness, I must make you aware that a significant part of this shortage was created when production at Cameco's Cigar Lake project in Canada was delayed due to flooding and, more recently, production at a Rio Tinto uranium mine in Australia was reduced also due to flooding.

So what about the uranium stocks traded on American exchanges? Well, there aren't that many in our database, but nine are gathered in a Special WatchList called Uranium Stocks. As of yesterday, the stocks in this WatchList were up an average of 41.79% from 12/15/06. Not bad.

As the boom in nuclear plant construction develops, you'll also want to consider buying stocks of the builders of these plants. James Cramer gave buy recommendations to two Engineering Construction stocks, Foster-Wheeler, FWLT, and Shaw Group, SGR, last Monday. There are many other EC stocks you may consider, but the best in the business is Areva, CEI.PA, a French company traded on the Paris Exchange. You can find it in VectorVest Europe.

There is much, much, more to the story behind uranium stocks. More than I can write about here. So I suggest you Google "Uranium stocks" to learn more on the subject and we promise to give you future Uranium Stocks Updates.

P.S. I cited PineTree Capital, which owns a ton of shares of uranium companies, on 11/03/06. It's up 70.7% since then.

TO STRADDLE OR NOT TO STRADDLE?
We received an email from a subscriber a few days ago in which he said he made $6,000 in a few days on a Dendreon, DNDN, Straddle. He had attended our Houston Options Course, given earlier in the month, and learned how to find these kinds of opportunities. A graph of DNDN shows that it exploded from $5.22 to $12.93, up $8.21 per share, on enormous volume on 03/30/07. Actually, he could have made much more money had he ridden the stock to its peak of $23.58 on 04/09/07. But that's not the point of this essay.

The point is that there's another hill to climb. The price of this drug company exploded on the recommendation of an outside panel of experts to the FDA. Now the FDA must decide for itself whether or not the drug works and is safe enough to use. The FDA does not have to accept the panel's recommendation. Some analysts who carefully followed the panel's deliberations feel there is a good chance the FDA will not approve the drug. In this case, DNDN's stock price will drop like a rock. Some say it will drop to $1.50 per share. The stock closed yesterday at $16.00 per share. If the FDA approves the drug, DNDN's stock price will fly. Who knows how high, but it could be a lot. So it seems like a perfect set-up for a Straddle. Or is it? The FDA ruling isn't due until May 15th.

In this week's "Strategy of the Week," Mr. John Campbell will show us how to decide whether To Straddle or Not to Straddle.