After the Close, 07 Nov 2007The uranium stocks didn’t have a very good day (I guess most of the market was lousy today). The Merv’s Daily Uranium Index of 50 uranium stocks closed lower by 0.193 points or 3.78%. There were 6 winners, 41 losers and 3 not going anywhere. Of the top five stocks by market value, Cameco lost 1.7%, Denison lost 2.6%, Paladin lost 1.9%, UEX lost 5.4% and Uranium One lost 4.9%. The best performer was Anglo-Canadian Uranium with a gain of 10.9% and the worst performer was Xemplar with a loss of 10.3%.
I warned yesterday of weakness in the Index performance and that a short term reversal may be at hand. Well, here it is. The Index closed just below its short term moving average line and the line slope has turned to the horizontal, not quite to the down side. The short term momentum indicator, although still in the positive zone, has definitely turned away from its overbought line. The more aggressive Stochastic Oscillator has moved below its overbought line for a reversal warning. Putting it all together, we are not yet into a full short term bearish trend but are very, very close. I would rate the Index as short term – NEUTRAL. It is not time now to be considering any new purchases in the uranium stocks. Wait for the short term to get stronger before jumping back in.
As for the intermediate term, the Index is still inside that up trending channel and as long as it is we have no problem with the intermediate term. The Index is still well above its intermediate term moving average line and the line continues to point upward. The momentum indicator is also still trapped inside its upward sloping channel but is closer to breaking below than the Index is. It is, however, still positive. The volume indicator is in a topping process but still looking okay at this time. On the intermediate term, although there may be some short term downside action, the rating remains BULLISH. BUT wait for the short term to strengthen before making any new intermediate term commitments.
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