Merv’s Weekly Uranium Review
for week ending 29 Feb 2008
Three weeks on the up side but still not yet time to be jumping up and down with joy. One day we’re all enthusiastic and then the market gives you a slap on the face and tells you to get real. Thursday it looked like the sky opened up and then Friday the slap came. Oh well, one must just keep on trucking.
So, what does the long term look like? The Merv’s Weekly Uranium Index closed higher by 851.10 points or 8.08%. More than 3% of that advance was due to the performance of one stock. There were 35 winners on the week and 14 losers. That leaves only one stock unchanged on the week. The weekly performance of the five largest stocks was mostly on the up side. Cameco gained 3.5%, Denison gained 14.1%, First Uranium was the lone loser with a loss of 5.8%, Paladin gained 3.2% and Uranium One gained 12.1%. The best weekly gainer was that one stock which moved the Index value by more than 3%. Hathor Exploration gained 173.7% on the week. Stocks usually warn you of a move ahead by the technical market action. In this case there was no advance warning, a somewhat rare occurrence. The worst performer on the week was USEC with a loss of 28.3%.
Going to the weekly chart and the long term indicators, the Index is still below the negative sloping moving average line and the momentum indicator is still in its negative zone. The Table shows us another sober indicator. The summation of individual stock ratings for the long term has the bullish side at only 19% while the bearish side is still at a significant 63%. Cutting this short there is no change yet in the long term prognosis. The rating remains BEARISH.
On Friday the Merv’s Daily Uranium Index had a reversal of fortunes. Thursday looked so good but only lasted a day. The Index closed lower by 0.091 points or 2.47%. There were 14 daily winners and 32 daily losers. 4 stocks were unchanged. Of the five largest stocks Cameco lost 3.2%, Denison lost 4.7%, First Uranium gained all of 0.1%, Paladin lost 2.7% and Uranium One lost 3.5%. The best single performer on the day was Western Prospector with a gain of 31.9% while the worst daily performer was Powertech Uranium with a loss of 13.1%.
Looking at the daily chart and the intermediate term indicators, we are in somewhat of a transition period with the indicators, especially the moving average, susceptible to the whip-saw effect. Thursday the Index closed above its moving average line and on Friday it closed just slightly below. The slope of the line remained negative throughout. The momentum indicator remains in its negative zone but above its positive sloping trigger line. The summation of individual stock ratings has now moved into the bullish camp with a bullish rating of 51% and a bearish rating of 39%. We were almost at the bullish rating on Thursday but now it must be down graded. I would place the rating at NEUTRAL with one eye on another rating change after Monday’s action.
As for the short term, that is also in somewhat of a transition. The Index is still above a positive sloping moving average line. The short term momentum indicator is also still in its positive zone but heading lower and has already crossed below its trigger line. The trigger line slope is, however, still positive. Looking at the more aggressive Stochastic Oscillator it continues in a lateral path but is below its trigger line and the line is sloping slightly downward. The activity remains within an upward sloping channel. The summation of individual stock ratings has moved higher into the bullish camp with a bullish rating of 75% and a bearish rating of 17%. Although there are some signs of a weakening process I will stick with the BULLISH short term rating for another day.
Unless the indicators suddenly become weaker speculators might feel more comfortable with their speculative efforts.
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