Merv’s Weekly Uranium Review
for week ending 12 September 2008
Merv’s Daily Uranium Index
Market Data for Friday 12 Sep 2008
Open: 174.66
Hugh: 186.61
Low: 171.47
Close: 182.02
Volume: 5598
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
Down and down and down it goes, where it stops nobody knows. Although Friday was a good day the week as a whole was once again a bummer. New bear market lows were reached with the long term momentum indicator confirming. I keep thinking “this can’t last” but to no avail. It lasts and lasts. Now we know that unless uranium stocks all go bankrupt the Index has to stop sometimes. For those following the technical discipline, i.e. get out when the charts say the top had been reached, all we have is a frustrating waiting period, but that’s better than seeing your capital go down the drain. Looking at the disaster called the Merv’s Weekly Uranium Index, the Index would have to climb 250% from here just to reach its previous top. Even if you don’t get back in at the bottom but, say, after a 50% advance, that’s still a 200% left to go before others are just breaking even.
The Merv’s Daily Uranium Index closed Friday on a high note. It was up 8.24 points or 4.74%. There were 42 winners on the day. I don’t recall that many winners for a long time. There were only 5 losers and 3 going nowhere. Of the five largest stocks, all were winners on Friday. Cameco gained 1.4%, Denison gained 10.9%, First Uranium gained 8.8%, Paladin gained 5.3% and Uranium Participation gained 4.9%. The best single performer on the day was Energy Fuels with a gain of 41.9% while the worst performer was Uranium 308 with a loss of 18.8%.
For the week as a whole, things were considerably different. The Merv’s Weekly Uranium Index closed the week lower by 609.34 points or 12.75%. As for winners and losers, they were almost the direct opposite to the Friday daily figures. There were only 4 weekly winners and 45 losers with one unchanged. Cameco lost 4.5%, Denison lost 10.4%, First Uranium lost 10.5%, Paladin lost 0.5% and Uranium Participation lost 7.2%. The best performer of those 4 winners was Continental Precious Minerals with a gain of 17.9% while the worst performer was Uranium 308 with a loss of 45.1%.
We can cover the long term situation very quickly. The Weekly Index remains well below its negative moving average line and the momentum indicator continues to move lower into new lows inside its negative zone. The long term rating can only be BEARISH.
On the intermediate term the charts and indicators are just as bad. The Daily Index has started to perk up but has not yet affected the intermediate term indicators. The Index remains below its negative sloping moving average line. The intermediate term momentum indicator has also perked up but still remains in its negative zone slightly below its negative trigger line. The indicator might move above its trigger in a day or so but it would take a little more for the trigger to turn around. The volume indicator also seems to be perking up but remains below its negative trigger line. So, although the perking up is there it has not affected the rating. The intermediate term rating remains BEARISH.
On the short term, this is where we should see changes first. To start, the Index has moved up towards its short term moving average line but has not yet crossed above the line. The moving average remains negative. The short term momentum indicator has now moved above its oversold line and above its trigger line. The trigger has also turned to the up side. So here we are seeing the beginnings of what might be a reversal. However, the momentum indicator is still below its neutral line in its negative zone so more work is really needed to start upgrading the rating. For today, the short term rating still remains BEARISH.
As for the direction of least resistance, well the Index did cross above its very short term moving average line during the daily high but ended the day slightly below the line. The moving average line remains sloping downward. The Stochastic Oscillator turned upwards a few days back and crossed above its trigger line on Thursday. On Friday the SO moved higher still and crossed above its oversold line. Although the Index is still below its very short term moving average line it is moving upwards. The aggressive SO is also moving higher although still in its negative zone. Although technically I would still rate the immediate term as bearish, the direction of least resistance is now to the up side.
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