Merv's Daily Commentary, 05 Nov. 2007

After the Close, 05 Nov 2007

Although the Merv’s Daily Uranium Index declined a little today there was not much really doing. The Index is presently in an area between 5.0 and 5.6 where a lot of previous activity occurred and it might be tough slugging its way through the area. The Index closed down 0.042 points or 0.82% on the day. There were 21 winners, 25 losers and 4 unchanged. Of the largest stocks by market value, Cameco gained 1.0%, Denison lost 2.6%, Paladin lost 2.5%, UEX lost 2.6% and Uranium One lost 4.0%. It looked like a “quality” stock losing day with the rest of the crowd holding up the Index. The best performer today was Mawson Res. with a gain of 18.6% while the worst daily performer was Alberta Star Development with a loss of 10.0%.

The Index is still trapped inside that up trending channel so right off we can assume that the intermediate term is still not in trouble. The Index is above its positively sloping moving average line and the momentum indicator remains in its positive zone. The daily average trading volume is still low overall but there are some good days. We need more of them. The momentum indicator, although in its positive zone is also trapped inside its own up trending channel. However, the slope of the trend is quite shallow possibly suggesting the strength behind the recent rally is not all that strong. Time will tell. For now everything is still on the plus side so the intermediate term rating remains unchanged, BULLISH.

Although we had a new rally high on Friday and trading continuing near the high today the momentum indicators are not confirming that action. They are not making new highs with the Index. This may be a prelude to a reversal of trend and should be watched carefully. For now the short term is still trending higher. The momentum indicator is in its positive zone just below the overbought line while the more aggressive Stochastic Oscillator is sitting just inside its overbought zone waiting to move lower. A Index drop below Thursday’s low at 4.77 should cause the indicators to turn negative. For now, go with the trend in motion and that is still BULLISH.