Merv's Daily Commentary, 20 Feb 2008

After the Close, 20 Feb 2008

The Index close was on the up side again but almost everything else was telling me the market was more down than up. The potential topping activity is still evident on the chart. Although the close was on the plus side the daily high and daily low were both lower than yesterday’s values. Although I have drawn a resistance line from the top of the mid-Jan activity maybe the early Feb highs are really the resistance, at least they are so far. The Merv’s Daily Uranium Index closed up 0.029 points or 0.85%. Nibble, nibble on the up side. We need a zoom. The winners and losers were more on the down side with 20 winners and 23 losers. 7 stocks closed unchanged. The best daily performer was Khan Resources with a super gain of 25.0% while the worst performer was Xemplar Energy with a loss of 9.4%.

I’m still waiting for something to change on the intermediate term but nothing seems to change. The Index is below its negative moving average line with the two continuing to close the gap. The momentum indicator continues to point gently higher but remains in its negative zone, above its positive sloping trigger line. The volume indicator continues to move higher above its positive trigger line. Although there are a few positive indicators they are more of the advance warning type rather than indications of reversals. Therefore I continue to rate the intermediate term as BEARISH.

On the short term the more aggressive indicators are suggesting the turn around is still in effect despite the daily Index advance. The Stochastic Oscillator has topped and is moving lower, below its now negative sloping trigger line. It is, however, still in its positive zone so the turn around may be short lived. As for the normal short term indicators, the most important is the moving average info. The Index remains above its positive moving average line while the momentum indicator is just touching its neutral line but still a hair inside the negative zone. It is above its positive trigger line and one more day of upside Index action and this indicator will go positive. The volume indicator is above is positive trigger line. Putting all this together I am still rating the short term as BULLISH but with a few warning bells to watch.

Gamblers may have a field day at times like this with many stocks in the turning process BUT speculators and investors should wait for the turns to be confirmed or they mat be taking greater risks than they expect.