After The Close, 20 May 2008
Merv’s Daily Uranium Index
Market Data
Open: 297.01
Hugh: 314.19
Low: 290.15
Close: 307.48
Volume: 9013
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
AND AWAY WE GO.
The box that has been such a confining feature of the Index action for so many weeks has been decisively broken, on the up side. The Index made a sharp upside move, and with significant volume action. All looks gung-ho for a good rally, maybe even a reversal of long term trend although that will still require much more work. However, let’s calm down for a few minutes and see exactly what the charts and indicators are really telling us.
The Merv’s Daily Uranium Index closed higher by 14.10 points or 4.81%. Even taking into account that yesterday was a holiday in Canada, where most of our stocks trade, that was a good day’s work. There were 38 daily winners, 10 losers and 2 unchanged. Of the five largest stocks it almost goes without saying that they all closed higher. Cameco gained 3.0%, Denison gained 8.1%, First Uranium Gained 0.2%, Paladin gained 5.2% and Uranium One gained 9.5%. The best gainer was Fronteer Development with a gain of 22.8%. There were two others within a couple of decimal % of that. The worst performer was Altius Energy with a loss of 6.5%.
As mentioned above, the Index still has some ways to go to affect the long term but the intermediate term has continued its positive transformation. The Index is well above its intermediate term moving average line and the line has just turned into the up side. As the chart shows, the momentum indicator is pointing almost straight upwards but is still slightly below its neutral line in the negative zone. It is, however, well above its positive sloping trigger line. As for the volume indicator (not shown) it is moving higher at a rapid rate. It is just about to breach its previous high set during the late February action. All in all, despite the momentum not yet in its positive zone, the charts and indicators sum up to an intermediate term BULLISH rating for the first time since last November.
Both the short and immediate (or very short) term are confirming the latest positive information. On the short term the Index is above its positive moving average line while the momentum indicator is continuing to move sharply higher in its positive zone, above its positive trigger line. It is, however, getting close to entering its overbought zone at which point we could start to expect some reaction to the move. The day’s volume action was the best in several weeks. The short term can only be rated as BULLISH.
As for the immediate term direction, that is up, up and away. Although the Stochastic Oscillator is the more aggressive momentum indicator that I use for my analysis it is still some distance from its overbought zone. Further away than the short term momentum from its overbought zone. On the other hand the SO has a habit of moving a lot faster than the RSI and may enter its overbought zone first, although it really doesn’t matter which gets there first. The immediate direction of the Index continues to be to the up side.
It’s times like this when the tables of technical information and ratings really come in handy to gauge which stocks may be the better upside plays. Tomorrow evening the daily version of the table gets posted. The short term info in the daily table may be used for short term action as it is quite accurate, at least as of the Wednesday data. In the weekly table one should not use the short term information for anything other than confirmation of the intermediate or long term trend. Using weekly data is not very good to get short term trading information. As I had mentioned when the daily table was introduced, the indicators are the same as those I use for my daily commentary.
Merv’s Daily Uranium Index
Market Data
Open: 297.01
Hugh: 314.19
Low: 290.15
Close: 307.48
Volume: 9013
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
AND AWAY WE GO.
The box that has been such a confining feature of the Index action for so many weeks has been decisively broken, on the up side. The Index made a sharp upside move, and with significant volume action. All looks gung-ho for a good rally, maybe even a reversal of long term trend although that will still require much more work. However, let’s calm down for a few minutes and see exactly what the charts and indicators are really telling us.
The Merv’s Daily Uranium Index closed higher by 14.10 points or 4.81%. Even taking into account that yesterday was a holiday in Canada, where most of our stocks trade, that was a good day’s work. There were 38 daily winners, 10 losers and 2 unchanged. Of the five largest stocks it almost goes without saying that they all closed higher. Cameco gained 3.0%, Denison gained 8.1%, First Uranium Gained 0.2%, Paladin gained 5.2% and Uranium One gained 9.5%. The best gainer was Fronteer Development with a gain of 22.8%. There were two others within a couple of decimal % of that. The worst performer was Altius Energy with a loss of 6.5%.
As mentioned above, the Index still has some ways to go to affect the long term but the intermediate term has continued its positive transformation. The Index is well above its intermediate term moving average line and the line has just turned into the up side. As the chart shows, the momentum indicator is pointing almost straight upwards but is still slightly below its neutral line in the negative zone. It is, however, well above its positive sloping trigger line. As for the volume indicator (not shown) it is moving higher at a rapid rate. It is just about to breach its previous high set during the late February action. All in all, despite the momentum not yet in its positive zone, the charts and indicators sum up to an intermediate term BULLISH rating for the first time since last November.
Both the short and immediate (or very short) term are confirming the latest positive information. On the short term the Index is above its positive moving average line while the momentum indicator is continuing to move sharply higher in its positive zone, above its positive trigger line. It is, however, getting close to entering its overbought zone at which point we could start to expect some reaction to the move. The day’s volume action was the best in several weeks. The short term can only be rated as BULLISH.
As for the immediate term direction, that is up, up and away. Although the Stochastic Oscillator is the more aggressive momentum indicator that I use for my analysis it is still some distance from its overbought zone. Further away than the short term momentum from its overbought zone. On the other hand the SO has a habit of moving a lot faster than the RSI and may enter its overbought zone first, although it really doesn’t matter which gets there first. The immediate direction of the Index continues to be to the up side.
It’s times like this when the tables of technical information and ratings really come in handy to gauge which stocks may be the better upside plays. Tomorrow evening the daily version of the table gets posted. The short term info in the daily table may be used for short term action as it is quite accurate, at least as of the Wednesday data. In the weekly table one should not use the short term information for anything other than confirmation of the intermediate or long term trend. Using weekly data is not very good to get short term trading information. As I had mentioned when the daily table was introduced, the indicators are the same as those I use for my daily commentary.
2 comments:
Hi Merv , This is the second time I have seen this large move in all my uranium stocks with large volume. The other time was a week or two ago. My question : Is finding a bottom usually like this?In other words does it usually revisit the bottom a number of times, in some kind of technical way? And what kind of volume do you look for , showing a decisive breakout?
Thanks Merv!
Gary,
It is not unusual for a stock or Index to make two or more "bottoms" before finally getting on its way. In technical language we have the "double bottom" or even "triple bottom". When we have these bottoms we wait for the price to exceed the highs that were reached during the period in between the bottoms before acting.
As for volume, well that's a subjective thing. To confirm a new upside move you usually look for an increase in volume activity on the up side. One should see at least a 50% increase in average volume that is averaged over some pre-period, say 15 or more days. One should also look for the volume to be increasing daily over a few days leading up to a large increaded volume day, on a break-out. But as I said, this is highly subjective and there are no clear cut criteria for it.
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