ASX Trader: This pullback isn’t game over - the next big run may still be ahead

This asset caught attention when it surged. But a pullback has everyone calling the end of the run. But those watching carefully will see something big brewing, writes ASX Trader.

Back in April, I wrote about uranium as a market that appeared to be bottoming, turning the corner, and approaching a potential breakout.

At the time, it wasn’t a crowded trade.

Uranium had spent years off most investors’ radars, while attention remained fixed on the usual mega-cap technology names.

But the chart was doing something that matters in every cycle: it was building a base.

More specifically, I highlighted the Global X Uranium ETF (URA) and pointed to the $23 area as an important decision level — the kind of “line in the sand” that often separates a market that is merely stabilising from one that is ready to trend.

Then the market confirmed it.

URA broke higher, and what followed was typical of a fresh bull phase when positioning is light: the move accelerated sharply, with the ETF going on to nearly triple from the lows. That’s not about bravado — it’s what often happens when an asset class shifts from being “dead money” to becoming market leadership.

For beginner investors, the key point is simple: the uranium story didn’t end with the first surge. In many ways, it may have only entered a new phase.

ASX Trader’s uranium post from April.

Why the April call mattered

Most investors wait until a theme is obvious.

The problem is that by the time it’s obvious, a large portion of the rally is often already behind you.

What was forming in April looked like a classic market cycle:

1. A long downtrend ends

2. A base forms (selling pressure fades and the market absorbs supply)

3. A breakout occurs (price pushes through a key level)

4. A trend begins (momentum improves and capital starts rotating in)

That move through the $23 zone was a strong sign that step three was underway — and once breakouts occur from multi-month bases, markets can move faster than many expect.

URA’s near-tripling was the market’s message: this wasn’t just a bounce — it was a trend shift.

Why a pullback can be a bullish sign

After a big rally, beginners often assume any pullback means the move is over.

In reality, strong bull markets typically alternate between two phases:

• Impulse: a powerful move higher

• Retracement / consolidation: a controlled “cooldown” that resets momentum

That second phase isn’t automatically bearish.

In fact, it’s often the setup.

If a market can pull back without collapsing, it’s showing constructive behaviour: it’s digesting gains, shaking out weaker holders, and rebuilding a base of support. That’s broadly what URA has been doing recently — a healthy retracement after a sharp run, the type of price action that can precede a further leg higher if the trend remains intact.

Is this the trajectory for Uranium?

The AI link: why uranium has a new demand driver

This is also why the uranium move isn’t just another short-lived commodity bounce.

The world is entering a period where electricity demand is stepping higher — and the driver is not what most people expect.

It’s artificial intelligence.

AI runs on data centres, and data centres run on electricity — not just any electricity. They require power that is:

• reliable

• scalable

• available 24/7

And this is changing the energy conversation. It’s no longer only “clean versus dirty.” It’s also: firm versus intermittent.

Solar and wind are essential and will keep growing but they are intermittent without firming. Batteries help, but large-scale grid upgrades and long-duration solutions take time. Nuclear sits in a unique position because it can deliver something increasingly valuable:

clean, firm, always-on power at scale.

That’s why uranium is being re-rated. AI doesn’t just increase energy demand — it increases demand for the kind of supply that keeps power systems stable.

Data centre build out schedule. Photo: Supplied

It’s not about price — it’s about outperformance

Price alone doesn’t tell you whether something is overvalued or undervalued.

You need context:

• Where are we in the cycle?

• Is it cheap or expensive historically?

• Is it bullish versus the benchmark?

•Is it outperforming — or just rising with everything else?

Because here’s the key: if it’s not going to beat the benchmark, why take extra risk?

If your goal is simply broad exposure, you can buy the S&P 500 passively and move on.

So the question isn’t, “Has uranium gone up?”

The question is: Is uranium, as an asset class, entering a new period of outperformance?

The chart professionals watch: Uranium vs the S&P 500 (relative strength)

This is where relative strength matters.

Rather than asking “Is URA rising?”, a better question is: Is URA beating the S&P 500?

When we chart uranium against the benchmark (often expressed as URA relative to the S&P 500), we’re measuring leadership and leadership is what attracts sustained capital.

Uranium has effectively been in a bear market for around 15 years on a relative basis. Cycles don’t typically go 15 years down, bounce for a year or two, and then end. When an asset class genuinely shifts, it often does so in multi-year phases.

What stands out on the longer-term view is:

• a strong bullish move beginning around 2020

• a clean re-accumulation phase over the following years

•and now: a monthly breakout, with a retest underway

That retest matters because it’s often where trends move from “interesting” to “confirmed.” And if this is a genuine monthly cycle shift versus the benchmark, it supports a simple conclusion:

We may not be late — we may still be early.

Uranium SP500 ratio.

Why this suggests the cycle has further to run

When a theme is genuinely early in a larger cycle, you often see three things align:

1. The fundamental case improves

(AI-driven power demand + energy security + nuclear re-rating)

2. A visible trend emerges on charts

(base → breakout → impulse move)

3. Relative strength turns up

(outperformance versus the benchmark)

At the moment, all three are present — which is why it’s reasonable to argue the uranium theme may have further to play out over time, even after a large initial move.

What beginners should watch next

If uranium is setting up for another push, keep it simple:

• Is URA holding above key support from the retracement?

• Is momentum improving as it builds a new base?

• Does the uranium vs S&P 500 ratio continue trending higher?

If those remain constructive, it suggests uranium is staying in leadership mode and leadership trends are where the biggest opportunities typically emerge.

The April setup played out: URA cleared a key level, surged sharply, and then began a healthy digestion phase.

Now the focus shifts from “how far has it come?” to the more important question: is uranium entering a longer period of outperformance versus the benchmark?

With AI and data centres ramping demand for reliable electricity and with relative strength improving versus the S&P 500 — the bigger message is straightforward:

This may not be the end of the uranium move.

It could still be the early stages of a broader cycle.

Originally published as ASX Trader: This pullback isn’t game over - the next big run may still be ahead