After the Close, 19 Nov 2007Ouch, another down day for the uranium stocks. I keep calling it a bearish short term but I keep hoping to be proven wrong. The Merv’s Daily Uranium Index closed down 0.193 points or 4.28%. There was only one, count them, only one stock that closed on the up side while a full 45 closed on the down side. Four stocks closed unchanged. As might be expected all of the five largest stocks by market value closed lower. Cameco closed down 3.0%, Denison closed down 5.0%, Paladin closed down 4.6%, UEX closed down 4.1% and Uranium One closed down by 0.3%. The best performer on the day was the only upside mover, Formation Capital, with a 5.8% advance. On the down side the worst performer was Khan Resources with a loss of 16.7%.
The intermediate term continues to get weaker and weaker. The Index closed below its intermediate term moving average line and the line has stopped moving upward. Today, the slope of the moving average line is exactly horizontal for a neutral slope (from a positive one previously). The rotation of the line slope continues towards the down side and another day should see it pointing downward. As shown on the chart the intermediate term momentum is in its negative zone and pointing lower. All in all, the only rating I can give the intermediate term is BEARISH.
The short term is also straight forward. The Index closed below its moving average line and the line is set in the downward direction. As for momentum, the short term momentum is well into its negative zone, in fact it is close to entering its oversold zone but not quite yet. The more aggressive Stochastic Oscillator is already in its oversold zone with no hint of reversing. The short term rating remains BEARISH.
As mentioned in previous commentaries this is not the time to be risking capital in new uranium stock purchases, unless you may know something most do not and are in a gambling spirit. My view is to wait till at least the short term turns around.
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