Merv's Daily Commentary, 02 Sept 2008

After The Close, 02 Sept 2008

Merv’s Daily Uranium Index
Market Data

Open: 222.19
Hugh: 225.51
Low: 211.09
Close: 215.69
Volume: 2720

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

Days like today almost makes one head for the bunker again. But all is not lost, as a review of the charts and indicators show us. The worst one can say is that we might be headed for a test of the previous low. After that, well ???

The Merv’s Daily Uranium Index closed lower by 8.88 points or 3.95%. The average loss of the 50 component stocks was not quite as bad with a loss of 2.56% on the average (difference in calculating the Daily Index info versus % change average). There were 11 winners on the day, 34 losers and 5 going nowhere. The five largest stocks were not all that great. Cameco lost 5.8%, Denison lost 4.7%, First Uranium lost 7.1%, Paladin lost 3.2% and Uranium Participation was one of those going nowhere. The best performer on the day was Quaterra with a gain of 15.5%, impressive on a day like today. The worst performer was Rockgate Capital with a loss of 15.9%.

As you can expect, with a down day and the intermediate term in a negative mode, nothing new happened. The Index remains below its negative moving average line and the momentum indicator remains in its negative zone. It is, however, still above its positive trigger line but is heading towards the trigger and could move below with another day or two of downside action. The volume indicator remains above its trigger line and the line has now turned upwards. We do have a few positives but by my secret method of combining the information the intermediate term rating remains BEARISH.

The short term is a lot more interesting as far as following the charts and indicators are concerned. Today’s Index action has suddenly taken the Index below its short term moving average line although the line is still very slightly sloping upwards. The momentum indicator, which on Friday was just a hair from breaking above its neutral line, has declined today and moved below its trigger line. The line has started to turn but is still very slightly on the positive slope side. The volume action may be encouraging in its low volume action on the down side although this is a normal activity of the speculators. The short term rating has been downgraded a few notches by this action to the – NEUTRAL level. We may be back into a lateral “box” again, time will tell.

The immediate term is getting more negative and with the Index below its very short term moving average line and the line slope having turned down and the Stochastic Oscillator having turned down, although still in its positive zone, the immediate direction may be thought to be downwards now. The next levels to really watch are the upper and lower levels of the “box”.