Merv's Daily Commentary, 12 May 2008

After The Close, 12 May 2008

Merv’s Daily Uranium Index
Market Data

Open: 293.88
Hugh: 297.43
Low: 284.51
Close: 289.69
Volume: 4284

Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.

Well, we can’t have the market going up forever. We have had 6 days in a row of upside Index action. That’s the most continuous up days since the Index reached its top a year ago in April 2007, when it had 8 straight days leading right up to the top. I’d sooner have 6 days and no top. At the present there is no real hint that the rally has ended. These one or two day rest periods always occur, no problemo. However, let’s go through the routine to see where we really are in this move.

The Merv’s Daily Uranium Index closed lower by 2.35 points or 0.80%. There were 16 winners, 27 losers and 7 unchanged. As for the 5 largest stocks, Cameco lost 0.3%, Denison lost 3.9%, First Uranium lost 2.0%, Paladin lost 2.3% and Uranium One gained 0.4%. The best performer on the day was Western Prospector with a gain of 26.0% while the worst performer on the day was Crosshair Exploration & Mining with a loss of 10.1%.

The intermediate term is still struggling to get to the bullish phase. However, even though it is above its intermediate term moving average line, the line slope remains stubbornly towards the down side. As for the momentum indicator, it remains in its negative zone but still above its positive sloping trigger line. The volume indicator also remains above its positive sloping trigger line. All in all, the intermediate term rating remains + NEUTRAL until a little more strengthening occurs.

In the short term where things usually happen quicker, nothing much has taken place with today’s small Index decline. The Index remains below that resistance line and within the previous “box”, which I have again shown on the chart. At this point one can say that the downside box break of two weeks ago was a false break and the box continues to remain valid. Despite the negative day the Index remains above its positive moving average line. The short term momentum indicator also remains in its positive zone above its positive trigger line. The volume indicator remains above its positive short term trigger line. The short term rating therefore remains BULLISH.

As for the immediate direction of the Index, it can still be said to be to the up side. The one day small decline has kept the Index above its very short term moving average line and the Stochastic Oscillator remains just above its overbought line inside the overbought zone. It is also just a minor amount above its positive trigger line. For now the immediate term direction remains upwards.

At this time I would not get too discouraged due to a one day quite minor Index decline. I would continue to get ready for a new bull market of some length, but of course I will let the daily Index action tell me when that really starts and more importantly, when it ends.