Merv's Week-End Commentary, 21 Sep 2008

Merv’s Weekly Uranium Review
for week ending 19 September 2008

Merv’s Daily Uranium Index
Market Data for Friday 19 Sep 2008

Open: 169.06
Hugh: 186.25
Low: 162.45
Close: 181.32
Volume: 8377

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

What a week! Friday we saw the best one day advance for a long, long time. We had a bigger spread between the daily high and low back in January but the closing price was not as good as Friday. However, one day does not a turn around make. Although Friday was a great upside day the week in general was still on the down side. Still, it felt good to see such an advance and one can start to dream again.

On Friday the Merv’s Daily Uranium Index closed up 18.07 points or 11.07%. That’s a one day advance -- wow --. The winners and losers were also well on the plus side but we have seen better recently. There were 37 winners, 10 losers and 3 going nowhere. As for the five largest stocks, well this seems to be where the advance was taking place. Cameco gained 10.9%, Denison gained 16.1%, First Uranium gained 33.4%, Paladin gained 09.0% and Uranium Participation gained 15.6%. The best daily performer was Uranerz Energy with a gain of 52.0% while the worst daily performer was Rockgate Capital with a loss of 7.0%.

As for the week as a whole, despite the advance on Friday the week still ended on a sour note. The Merv’s Weekly Uranium Index closed down 174.65 points or 4.19%. There were 16 winners, 33 losers and 1 unchanged on the week. Of the five largest companies Cameco lost 6.2%, Denison lost 6.5%, First Uranium gained 26.8%, Paladin lost 11.6% and Uranium Participation gained 9.8%. The best weekly gainer was Uranerz Energy with a weekly gain of 39.9% overcoming a running loss for the week prior to Friday. The worst weekly performer was Tournigan Energy with a weekly loss of 40.9%.

Despite the Friday reversal the weekly Index had a negative week and therefore as one can expect there was no change in the indicators. The Index remains below its negative sloping long term moving average and the long term momentum indicator remains in its negative zone trending lower and lower towards its oversold zone. The long term rating remains BEARISH.

The Friday action has started to perk up the intermediate term indicators but not yet to the degree of changing anything. The Daily Index is still below its negative sloping moving average line and the momentum indicator remains in its negative zone. The indicator has perked up and has moved above its trigger line with the trigger turning upwards. That’s a start but more is still required. The volume indicator has turned upwards but is still below its intermediate term trigger line. All in all the intermediate term rating remains BEARISH but with some minor signs of life.

Coming to the short term, this is where the action changed direction first. The Daily Index has closed above its short term moving average line, however, the line is still sloping downward so a little extra effort is needed to turn the moving average around. The short term momentum is on a roll. It moved above its previous week’s high, above its oversold line and above its positive sloping trigger line. Unfortunately, it is still slightly below its neutral line and in its negative zone. The daily high just reached the highs of the previous week so that we now have a short term resistance level to overcome. A close above 186.6 would do it. The daily volume has also been perking up, which is a good sign if it continues. For today, the short term rating has been upgraded to the + NEUTRAL level, just shy of a full bull rating.

Looking to see what the direction of least resistance might be one can only come up with the up side after Friday’s action. The Daily Index is above its positive very short term moving average line and the aggressive Stochastic Oscillator is quickly moving towards its positive zone but still inside the negative. It looks like more upside ahead.

During days like Friday there is a great urge to get quickly on the bandwagon and buy, buy. The indicators are not yet confirming such bullishness but of course these indicators will tell us after the fact that a bottom was reached. However, you will then be in a less risky environment for speculating. Bottom fishing or technical speculating, take your pick. Investing is still a long way off.