Merv’s Weekly Uranium Review
for week ending 02 May 2008
Friday’s Daily data
Open: 263.22
Hugh: 269.98
Low: 259.36
Close: 264.15
Volume: 3551
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
Occasionally I show the P&F chart instead of the normal bar or candlestick chart. I like P&F as it filters out all the minor price fluctuations and only shows the significant ones, based upon the criteria one applies. Support and resistance points as well as trends are often more clearly shown on these charts. On this chart each unit is equal to 5 Index points, not 4.5 or 3.2 but 5.0. A new unit is plotted ONLY when the full 5 points are covered. The plots are in the vertical direction. One changes direction ONLY when you can cover the number of full units one picks as the reversal criteria. On this chart one must cover a full 3 units below the highest X or a full 3 units above the lowest O. I call the vertical columns, directions. Trends are defined by 90 degree trend lines. Trend reversals are confirmed when one plots above two previous Xs AND above the down trend line or below two previous Os AND below the up trend line. The trend lines that I show are bullish or support lines in blue and bearish or resistance lines in red. The thickest line is the primary trend. The thinner line is a secondary trend while a dashed line is a secondary secondary trend. That’s it for your P&F lesson.
What the chart shows is that once the Index reached its peak in November and confirmed a reversal at the 460 level it has been down hill ever since. There was one period in February when the short term rallied but DID NOT confirm a reversal of trend. We are still in the short term bear market and per the P&F chart, assuming no additional up and down moves along the way, a reversal would not be confirmed until the 295 level. There are a lot of other things one can get from this P&F chart but I wouldn’t go into it today. One can do a lot worse than to follow a chart such as this.
Let’s get back to the real world. The Merv’s Daily Uranium Index closed Friday on the up side by 1.26 points or 0.48%. There were 24 daily winners, 19 losers and 7 unchanged. Cameco gained 1.2%, Denison lost 0.2%, First Uranium gained 3.1%, Paladin gained 2.5% and Uranium One gained 0.7%. The best performer on the day was Pele Mountain with a gain of 12.2% while the worst daily performer was Pitchstone Exploration with a loss of 5.7%.
As for the weekly data, the Merv’s Weekly Uranium Index closed lower by 314.50 points or 4.69%. There were only 9 weekly winners and 38 losers with 3 unchanged. For the week Cameco lost 3.9%, Denison lost 4.6%, First Uranium gained 4.5%, Paladin lost 0.9% and Uranium One lost 7.1%. The best weekly performer was Quaterra with a gain of 10.8% while the worst weekly performer was Pele Mountain with a loss of 23.3%, despite that Friday gain.
The weekly chart shows how far we have declined since reaching the peak in April of 2007. However, one should understand from where we came. This chart starts in the first week of 2005 at 1500 but the Index goes back to the start of 2003 when the Index stood at 100. In a little over 8 years the Index is still ahead some 6384%, that’s after the recent decline. The stocks must have been very much over priced. Some say that now the stocks are under priced. We’ll see, the market will tell us so and when also it wants to reverse back to the up side.
For now the weekly Index (and the daily one) is still below its long term negative sloping moving average line. The long term momentum is still in its negative zone and continuing to move into new low territory. The long term rating remains BEARISH.
Going to the Merv’s Daily Uranium Index for our intermediate and short term prognosis we see (well, I see) that the Index remains below its negative sloping moving average line. The momentum indicator remains in its negative zone below its negative sloping trigger line. The volume indicator continues to move very slowly lower below its negative trigger line but is still some distance above its previous April first low. All in all the intermediate term rating can only be considered as BEARISH.
Still nothing happening from the short term chart. The Index is still below its negative sloping moving average line although the two are very close together and a move above the line could be done in one or two days of decent upside action. The short term momentum indicator has now once more moved above its trigger line and the trigger has oh so gently turned to the up side. So, there are once more the very initial signs of a possible turn around BUT a lot more strengthening needs to be done. For now the short term rating remains BEARISH.
Keep relaxing, have a beer, watch TV but if you are a Montreal hockey fan you might want more than a beer, and I’m with you.
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