Merv’s Weekly Uranium Review
for week ending 03 October 2008
Merv’s Daily Uranium Index
Market Data for Friday 03 Oct 2008
Open: 140.77
Hugh: 151.27
Low: 136.17
Close: 141.16
Volume: 5499
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
The week started with a plunge and didn’t end much better. It’s been a miserable few months, in fact it’s been a miserable year and a half. How much longer can this go on? Well, one must look back to where we came from to imagine if there is any more downside potential. I mentioned the other day that I did have one projection all the way down to the 50 level on the Daily Index. A similar drop on the Weekly Index would take us to just below the 1300 level, or back to where we were in late 2004 but still more than 1000% above where the Weekly chart started in early 2003. It’s all perspective. Those who got in during the past few years, and stayed in, are tearing their hair out while those who got in prior to 2004 and stayed in are probably still looking good even with the past year and a half decline. How would a technician have done? Well, looking at the Weekly chart one need not be a technician to get the feeling that a technician would have done quite well regardless of when he started his activities.
The Merv’s Daily Uranium Index closed on Friday with a slight upside move. It was up 2.66 points or 1.92%. The winners and losers were split 50/50 with 21 each. The stocks standing still were 8. As for the five largest stocks by market value, they did very well on the day, except for USEC. Cameco gained 5.4%, Denison gained 1.5%, Paladin gained 8.5%, Uranium One gained 9.3% and the one loser USEC lost 6.3%. The best daily gainer was Western Prospector with a daily gain of 115.63% wiping out a substantial portion of the previous day’s loss. However, it still needs another 100% gain to get it back to Thursday’s price. A merger collapse resulted in the plunge, a merger back on possible track got the price up again. Manipulation anyone? The worst performer on the day was Trigon Uranium with a daily loss of 25.0%.
As for the week as a whole, the Merv’s Weekly Uranium Index closed the week with a weekly loss of 712.19 points or 18.24%. There was only one winner on the week and 49 losers. Gee I hate those kinds of numbers. Of the five largest stocks by market value, Cameco was the only one that did not have a double digit weekly loss. Cameco lost only 7.2%, Denison lost 25.3%, Paladin lost 16.7%, Uranium One lost 42.0% and USEC lost 22.1%. The best weekly winner was, of course, the only winner, Tournigan Energy, with a weekly gain of 2.4%. The worst weekly loser was Trigon Uranium with a loss of 50%.
One need not go into much detail to understand where we are with the long term rating. The Weekly Index remains far below its negative long term moving average line and the long term momentum indicator continues to move ever lower in its negative zone. It is just touching its oversold line. It hasn’t been anywhere this low since the Index was first developed. Needless to say, the long term rating remains BEARISH.
On the intermediate term we are not much better off. Once again the Daily Index has moved sideways, but for how long? The Friday’s action was well within the boundaries of Thursday’s activity. However, although the Index tried to rally during the day it ended up closing near its daily low, so it must have retraced its earlier attempt at a rally. Whether this type of action will continue into Monday remains to be seen. For now the Daily Index remains below its negative sloping moving average line and the momentum indicator remains in its negative zone, below its negative sloping trigger line. Of interest is the fact that the momentum did not move below its previous mid-Sept low as the Index has therefore not confirming the Index move into new lows, at least at this time. The volume indicator has also not moved into new lows. Despite the Index drop things technically may not be as negative as they first look. However, that does not help as far as the rating goes. It is still BEARISH on the intermediate term.
The short term is also in sad shape. The Index continues below its negative short term moving average line, the very short term moving average continues below the short term and the momentum indicator continues in its negative zone below its negative sloping trigger line. The momentum indicator is also inside its oversold zone waiting for a decent up day to get out and indicate a rally, but we’ll just have to wait for it. The short term continues to be rated as BEARISH.
As for the immediate direction of least resistance, I would stick with my yesterday’s view that it remains to the down side. The Index did move sideways and normally I might go to the lateral trend but the action of Friday afternoon was mostly to the down side so I’ll continue with that direction.
I guess uranium enthusiasts should continue to relax, have another beer, watch TV (darn, no more Palin debates), surf the net and just take it easy until the reversal finally gets here.
No comments:
Post a Comment