After the Close, 12 Nov 2007WOW! That was not a good day at all. The Merv’s Daily Uranium Index of 50 stocks lost 0.245 points or 5.08% on the day. There were only 3 stocks showing a gain while a full 42 stocks were showing a loss. Five stocks showed nothing. Of the five largest by market value, Cameco lost 6.5%, Denison lost 7.6%, Paladin lost 7.1%, UEX lost 6.4% and Uranium One lost 10.8%. All losses are greater than the overall Index average. The “quality” stocks took the greater hit today. The best performer was Uranium Energy with a gain of 9.6% while the worst performer was Anglo-Canadian with a loss of 16.4%.
Although we have had many other days like this, this one was important. It has resulted in breaking of a three month up trending channel and has put the intermediate term uranium market at risk of a reversal. The Index closed just above its intermediate term moving average line with the line still pointing upwards. The momentum indicator, however, is a different story. It has broken below its up trending channel and has closed just below its neutral line, inside the negative zone. The volume vindicator is still holding its own but it is expected to follow the trend being set by the Index. For now, the technical indicators do not yet give a reversal signal so I will lower the rating to a – NEUTRAL rating, one level above a full bear. As an aside, the intermediate term P&F chart has also not yet issued a reversal signal so that is still some comfort. None should be contemplating buying new stock under these conditions. Wait for the short term to at least reverse.
As for the short term, that’s an easy one today. The Index continues below its short term moving average line and the line is pointing downward. The short term momentum indicator is comfortably inside its negative zone and heading lower. The short term rating continues BEARISH.
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