After The Close, 07 May 2008
Merv’s Daily Uranium Index
Market Data
Open: 277.29
Hugh: 294.99
Low: 273.14
Close: 289.7
Volume: 7590
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
There was a “feeling” that the upward move two days ago was false and yesterday was an indication that maybe we are getting ahead of ourselves. I know, I know, that was MY “feeling”. However, this is a good example as to why one goes with the charts and indicators and not “feelings”. Today we have seen one of the best upward moves in the uranium stocks in a long time. Just one little hurdle left and we can then start to get back into the stocks with vigor. That hurdle is, of course, the resistance from the previous “box” pattern.
The Merv’s Daily Uranium Index closed up 13.94 points or 5.06%. The Weekly Index, which is calculated based upon the average performance of all Index component stocks, actually did better with a 6.25% advance. The winners and losers finally started to perk up. There were 39 winners, 8 losers and 3 unchanged. As for the five largest stocks, Cameco gained 7.3%, Denison gained 8.5%, First Uranium lost 1.0% (I wonder what’s going on there?), Paladin gained 9.5% and Uranium One gained 3.8%. The best performer on the day was Uracan Resources with a gain of 33.3% while the worst performer, Altius Energy, could only muster up a 4.6% loss.
Another positive pattern that I had not mentioned before was a downward sloping wedge pattern (see the chart). There are two things about a wedge pattern such as this. In a down trend, a downward sloping wedge pattern is usually a bullish pattern. The second thing is that the break-out should occur at about the one half to two thirds point towards the final apex of the two lines. This is what we have. The closer it then gets to the apex point the weaker the break-out is thought to be. The reverse is true for an upward sloping wedge pattern in a bull trend.
Well, with the third FAN trend line broken on the up side and even the alternate one broken I guess it’s time to put the FAN trend lines into hibernation. I just showed the final trend line today as it was just broken on the up side. There is only that resistance from the previous “box” to overcome now.
On the intermediate term things are happening. The Index, with its great move today, closed above its moving average line although the line is still in a negative slope. The momentum indicator has taken a sharp zoom upwards and is well above its previous highs from that box period. It is well above its positive trigger line but not yet in its positive zone. As for the volume indicator, it is also moving sharply higher and is also above its box resistance levels. It is also above its positive trigger line. All this now causes me to upgrade the intermediate term rating. It has not quite gotten to the bullish level but has moved up to the + NEUTRAL level which is just one level below a full bull. It’s going in the right direction.
As for the short and very short term, everything is going in the right direction except for one cautionary indicator. On the short term the Index is above its positive short term moving average line and the momentum indicator is now above its neutral line in the positive zone, above its positive trigger line. On the short term the rating remains BULLISH.
As for the very short term, the Index is also above its very short term moving average line with the line sloping upwards. The very short term moving average line has now crossed above the short term line for another sign that we are in a positive trend. The aggressive Stochastic Oscillator continues to move sharply higher above its positive trigger line. The one caution on the immediate trend is that the Stochastic Oscillator has now entered its overbought zone. A reversal of direction or a rest (lateral) period may be ahead BUT just the fact that the SO has entered its overbought zone does not mean anything will happen immediately. It is just a cautionary sign for now. So, the immediate term direction continues to be BULLISH.
Merv’s Daily Uranium Index
Market Data
Open: 277.29
Hugh: 294.99
Low: 273.14
Close: 289.7
Volume: 7590
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
There was a “feeling” that the upward move two days ago was false and yesterday was an indication that maybe we are getting ahead of ourselves. I know, I know, that was MY “feeling”. However, this is a good example as to why one goes with the charts and indicators and not “feelings”. Today we have seen one of the best upward moves in the uranium stocks in a long time. Just one little hurdle left and we can then start to get back into the stocks with vigor. That hurdle is, of course, the resistance from the previous “box” pattern.
The Merv’s Daily Uranium Index closed up 13.94 points or 5.06%. The Weekly Index, which is calculated based upon the average performance of all Index component stocks, actually did better with a 6.25% advance. The winners and losers finally started to perk up. There were 39 winners, 8 losers and 3 unchanged. As for the five largest stocks, Cameco gained 7.3%, Denison gained 8.5%, First Uranium lost 1.0% (I wonder what’s going on there?), Paladin gained 9.5% and Uranium One gained 3.8%. The best performer on the day was Uracan Resources with a gain of 33.3% while the worst performer, Altius Energy, could only muster up a 4.6% loss.
Another positive pattern that I had not mentioned before was a downward sloping wedge pattern (see the chart). There are two things about a wedge pattern such as this. In a down trend, a downward sloping wedge pattern is usually a bullish pattern. The second thing is that the break-out should occur at about the one half to two thirds point towards the final apex of the two lines. This is what we have. The closer it then gets to the apex point the weaker the break-out is thought to be. The reverse is true for an upward sloping wedge pattern in a bull trend.
Well, with the third FAN trend line broken on the up side and even the alternate one broken I guess it’s time to put the FAN trend lines into hibernation. I just showed the final trend line today as it was just broken on the up side. There is only that resistance from the previous “box” to overcome now.
On the intermediate term things are happening. The Index, with its great move today, closed above its moving average line although the line is still in a negative slope. The momentum indicator has taken a sharp zoom upwards and is well above its previous highs from that box period. It is well above its positive trigger line but not yet in its positive zone. As for the volume indicator, it is also moving sharply higher and is also above its box resistance levels. It is also above its positive trigger line. All this now causes me to upgrade the intermediate term rating. It has not quite gotten to the bullish level but has moved up to the + NEUTRAL level which is just one level below a full bull. It’s going in the right direction.
As for the short and very short term, everything is going in the right direction except for one cautionary indicator. On the short term the Index is above its positive short term moving average line and the momentum indicator is now above its neutral line in the positive zone, above its positive trigger line. On the short term the rating remains BULLISH.
As for the very short term, the Index is also above its very short term moving average line with the line sloping upwards. The very short term moving average line has now crossed above the short term line for another sign that we are in a positive trend. The aggressive Stochastic Oscillator continues to move sharply higher above its positive trigger line. The one caution on the immediate trend is that the Stochastic Oscillator has now entered its overbought zone. A reversal of direction or a rest (lateral) period may be ahead BUT just the fact that the SO has entered its overbought zone does not mean anything will happen immediately. It is just a cautionary sign for now. So, the immediate term direction continues to be BULLISH.
2 comments:
The decline has been staggering condidering all the hype surrounding this very important mineral,you seem to be on the verge of declaring a move to the upside in this market for stocks. We in South Africa have mainly the stock Uranium One to invest in and in your schedule you rate its prospects above average for the period ahead, am I right in this asumption?
Bernard,
I am a pure technician and this is a blog from the technical discipline, as the various information on the left side of the blog indicates.
Technical analysis tries to assess what the thousands of investors and speculators are actually doing with their money and based upon historical precedence for similar situations try and determine what to expect ahead.
Technical information and ratings are not predictions of the future. They are an assessment of the stock position at the present. This could quickly change tomorrow or the day after, depending upon the investors and speculators subsequent activity.
Although UUU may have had positive ratings or technical information in the past, that seems to have diminidhed and the latest can be seen in the weekly table published. One should also check the Daily table posted on Wednesday.
Thanks for your interest and I hope my answer was of some assistance.
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