Merv’s Weekly Uranium Review
for week ending 25 Apr 2008
Friday’s Daily data
Open: 271.40
Hugh: 277.06
Low: 265.99
Close: 271.87
Volume: 3626
Well, another week has gone by and we are still in that “box”. How much longer it can keep moving sideways I don’t know but one would think that 5 ½ weeks would be enough for the market to decide which way it wants to go. Of course, as long as it’s going sideways it’s not going down. That’s small mercies.
I was talking the daily Index, the weekly Index closed at a new bear market low. It is tracking the lower support trend line of that large wedge pattern. As mentioned in the past, the development of a downward sloping wedge pattern is usually a suggestion that the eventual break-out will be on the up side. However, looking at the chart, that could still be some time to come.
For the stock action, first the Friday daily info. The Merv’s Daily Uranium Index closed up on the day. It was ahead 2.20 points or 0.82%. Barely made a dint in the chart. There were 22 daily winners, 20 daily losers and 8 unchanged for a somewhat neutral kind of day. As for the five largest stocks they all had an upside day. Cameco gained 2.3%, Denison gained 1.8%, First Uranium gained 2.2%, Paladin gained 1.2% and Uranium One gained 3.8%. The best gainer on Friday was Western Uranium with a gain of 12.7% while the biggest loser on the day was East Asia Minerals with a loss of 9.7%.
As for the weekly info, the Merv’s Weekly Uranium Index lost 261.28 points or 3.75%. There were 13 weekly winners, 35 weekly losers and 2 unchanged. Cameco lost 2.3%, Denison lost 7.4%, First Uranium gained 2.7%, Paladin lost 5.6% and Uranium One gained 6.0%. The best weekly gainer was Frontier Pacific with a gain of 35.7% while the worst loser was Xemplar Energy with a loss of 20.0%.
With the Weekly Index hitting new lows and trading below its negative long term moving average line and with the momentum indicator continuing in its negative zone and confirming the Index by hitting a new low what can one say? The long term continues BEARISH with no immediate end in sight.
As far as the intermediate term is concerned, we have the Daily Index below its negative sloping moving average line with the momentum indicator in its negative zone below a negative sloping trigger line. The momentum indicator DID NOT confirm the Index move into new lows, at least not yet. It remains above its previous low value and giving us a mild positive divergence at this time. The volume indicator is basically in a lateral trend and sitting on top of its trigger line. The daily volume action is very low, even on Friday on an up Index day. With this low daily volume one cannot expect any kind of sustained up move, unless the volume really perks up during the move. One should not take low volume on down days as a good sign, stocks (and Indices) can go a long way down with low volume. It increasing volume that tells a story and that we yet don’t have. The intermediate term rating remains BEARISH.
On the short term that “box” continues to dominate. The Index just can’t seem to get out of the box. The Index remains below its short term moving average line and the line remains in a negative slope, although just barely. The short term momentum indicator remains in its negative zone and although it has perked up a bit on Friday it continues to move lower, below its negative trigger line. The more aggressive Stochastic Oscillator is well inside its negative zone and almost at its oversold line. On Friday the SO moved sideways. Looking back at such sideways action in the past it seems that often this is a precursor to the Index reversing its direction, at least for a short time. We might be looking at a minor rally ahead. However, as far as the short term rating is concerned I must remain BEARISH until the indicators tell me otherwise.
Still not the time to get the money out of the mattress and jump into the market. This is still the more beer and TV time. Hey, maybe the HABS (that’s the Montreal Canadians hockey team for those who don’t know) will take the cup this year.
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