Merv's Daily Commentary, 01 Nov 2007

After the Close, 01 Nov 2007

With the “bad news” one reads in the media about the rough time the largest uranium companies seem to be having it’s a wonder that the Merv’s Daily Uranium Index has not totally collapsed. However, cooler heads prevailed and the Index held it’s ground. The Index lost 0.037 points or 0.75% on the day. The winners and losers were somewhat better with 24 stocks on the winning side, 16 stocks on the losing side and 10 on no side at all. Of the five largest stocks based on market value, Cameco lost 7.8%, Denison lost 1.1%, Paladin gained 1.5%, UEX gained 3.1% and Uranium One gained 1.1%. The best daily performer was Forsys Metals with a gain of 19.6% while the worst performer was Cameco with that loss of 7.8%.

The Index is still trapped inside that up trending channel so from the intermediate term we still have no worry about uranium stocks in general. The action is still above a positive sloping moving average line and the momentum indicator is still above its neutral line, in its positive zone and also still trapped in its own up trending channel. Regardless of how one addresses yesterday’s volume (see yesterday’s commentary) the volume indicator can still be regarded as positive. So, everything looks good and the BULLISH intermediate term rating continues.

On the short term things are not quite that all out positive but still no reversal has been confirmed. The Index low for the day just touched the up trending moving average line and closed above the line. The short term momentum indicator is still in its overbought zone but just about ready to drop below the overbought line. The more aggressive Stochastic Oscillator HAS dropped below its overbought line for a warning that the immediate direction of least resistance may have changed to the down side. We might see some down days ahead with the Index dropping below its short term moving average line but the line to watch would be that lower channel up trend line, the support line. With the Index still above its moving average line I can’t drop the rating any further than NEUTRAL, and that’s where we remain for another day.