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From a pure performance perspective, you’ll be hard-pressed to find many more enterprises that have delivered the goods this year as much as Uranium Energy Corp (UEC). Since the start of this year, UEC stock has gained over 139%. What’s more, during the trailing-month period, the equity has gained just under 232%. However, with all this enthusiasm baked in, prospective investors naturally fear holding the bag.

It's not just a feeling or vibe. Since the business week beginning July 14, there have been 14 weekly sessions (inclusive of the current week). Of this tally, only three of the weeks have been down weeks (defined as the loss between Monday’s open and Friday’s close). Sure enough, the relative strength indicator (RSI) shows a reading (on a weekly scale) of 85.49, indicating an overbought status.

On paper, the prudent approach may be to trim exposure. On Thursday, UEC stock dropped more than 4% amid a broader selloff. Several high-profile names saw a sharp correction, which fueled a mini-panic of sorts. Still, the evidence supporting pensiveness isn’t quite clear cut.

Quantitatively, UEC stock is structured in an 8-2-U formation: eight up weeks, two down weeks, with an overall upward trajectory. This sequence is extremely rare, representing only 2.99% of all identifiable 10-week patterns since January 2019. However, when this sequence is tagged— much like marine biologists do with sharks — its behavioral patterns relative to baseline can be analyzed.

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Over the next 10 weeks, UEC stock would be expected to land above the starting point or anchor price more often than not, which could mean that the security may be on a relative discount.

Adding to the contrarian narrative is the high short interest. With shorting activities representing more than 10% of the float — along with a short interest ratio of 2.49 days to cover — the threat of a short squeeze isn’t insignificant.

As such, adventurous investors may want to keep their eyes on UEC stock. It might not be the most convincing idea but there could still be some fuel left.

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