Time to Buy This 'Trump Trade' Penny Stock?

Traders are watching nuclear stocks, after yesterday's comments from President Donald Trump regarding U.S. nuclear capabilities. President Trump said he wants to expand the U.S. nuclear arsenal to make sure the country is on "top of the pack" among global nuclear powers. Uranium Resources, Inc. (NASDAQ:URRE) reacted quickly after Trump's comments -- setting off a "buy" signal -- though the penny stock is stumbling with the broader market today.

URRE On the Charts

URRE is down 3.4% at $1.95 so far today. However, yesterday, URRE shares crossed above their 50-day moving average, which is historically seen as a bullish signal. The last time this happened, in the last few days of 2016, URRE jumped roughly 200% in the following two weeks, hitting an annual high of $4 on Jan. 12. Since then, the stock has given back most of those gains, and recently struggled to overcome the 50% Fibonacci retracement level of their 2016 low and 2017 high.

Short Sellers Set Sights on Uranium Resources

Short sellers, however, have been piling on the uranium stock. Uranium Resources, Inc.'s (NASDAQ:URRE) short interest is up 33.3%, and accounts for 18.2% of URRE's float. Nevertheless, it would take less than one session for traders to cover these bearish bets -- at URRE's average daily volume -- likely because there's only so far a penny stock can fall.