After The Close, 12 Nov 2008
Merv’s Daily Uranium Index
Market Data
Open: 105.23
High: 112.31
Low: 98.03
Close: 110.89
Volume: 6127
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
We’re still in the box but maybe we can start dreaming again. The Index was up on the day although not that impressively. However, there are some more indications that we just might have hit a bottom, for now. Let’s see where we are.
The Merv’s Daily Uranium Index closed up by 5.24 points or 4.96%. There were 23 winners, 17 losers and 10 stocks just sitting there. Not the best ratio of winners to losers but going in the right direction. The movement in the five largest stocks was impressive today. Cameco gained 7.8%, Denison gained 25.0%, Paladin gained 6.5%, Uranium One gained 13.0% and USEC gained 3.9%. With a move like that one might think that Denison might be the best winner on the day but East Asia Minerals was better. It gained 39.4%. As for the loser on the day, that was JNR Resources with a loss of 12.5%.
Mines come and go. Some change their names and are reborn. Back in the early 1950’s, as I recall, there was a mining speculator, Stephen Roman if I recall correctly, who controlled a penny stock called Consolidated Denison Mines. As I recall the story, there were rumors of a great mineral discovery. A friend of mine was into these penny stocks and subscribed to some market letter that I forget the name of. That market letter implied that Mr. Roman had some sort of a shaky background and one should not pay any attention to the rumors. Low and behold, the rumors were true and the final result is the Denison Mines of today. The market letter writer subsequently wrote an apology to his subscribers when the find was validated. Just a little story that one should not think that just because one writes a market letter, or a column, one knows everything.
Some of you might have picked up on the missing link in this story, the lack of technical analysis. The stock price was moving, the confirmation of the uranium find came much later.
It appears that the intermediate term indicators are in the very early process of turning back to the up side, not yet fully turned but in the process. The weakest link seems to be the Index being some distance below its intermediate term moving average line. The line, by the way, has just entered the box zone. The momentum indicator broke below its trigger line yesterday but is back above its trigger today. The trigger line itself continues to slope upwards. An interesting note, very often one can draw better trend lines on the indicators than on the Index (or stock) itself. While we do not have any up trend line on the Index we do have one on the momentum indicator. The indicator has perked up and in the process of moving higher, above the trend line. Having said all that the rating unfortunately remains BEARISH.
On the short term we have a similar up trend line in the momentum indicator. Here, the momentum is actually bouncing off the trend line making a third point of touching for a stronger trend line. The momentum still remains below its neutral line and below its negative sloping trigger line so some more work is required here. The Index remains below its negative sloping moving average line but it could easily break above with another day of reasonable upside action. The very short term moving average has now moved below the short term average for a negative implication, but this too could change on one day’s activity. For now the short term rating remains BEARISH.
As for the direction of least resistance, well that is changing. As mentioned in earlier comments I really should stay with a lateral assessment as long as the Index stays in the box but the upper and lower boundaries are far enough away so that one might go with an up or down assessment. The aggressive Stochastic Oscillator has just moved above its oversold line for an indication of a rally in progress. Not a strong signal but a warning anyway. The action today suggests that the later part of the day had seen an upward movement in the Index. So, I’ll go with the direction of least resistance as being to the up side now.
Merv’s Daily Uranium Index
Market Data
Open: 105.23
High: 112.31
Low: 98.03
Close: 110.89
Volume: 6127
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
We’re still in the box but maybe we can start dreaming again. The Index was up on the day although not that impressively. However, there are some more indications that we just might have hit a bottom, for now. Let’s see where we are.
The Merv’s Daily Uranium Index closed up by 5.24 points or 4.96%. There were 23 winners, 17 losers and 10 stocks just sitting there. Not the best ratio of winners to losers but going in the right direction. The movement in the five largest stocks was impressive today. Cameco gained 7.8%, Denison gained 25.0%, Paladin gained 6.5%, Uranium One gained 13.0% and USEC gained 3.9%. With a move like that one might think that Denison might be the best winner on the day but East Asia Minerals was better. It gained 39.4%. As for the loser on the day, that was JNR Resources with a loss of 12.5%.
Mines come and go. Some change their names and are reborn. Back in the early 1950’s, as I recall, there was a mining speculator, Stephen Roman if I recall correctly, who controlled a penny stock called Consolidated Denison Mines. As I recall the story, there were rumors of a great mineral discovery. A friend of mine was into these penny stocks and subscribed to some market letter that I forget the name of. That market letter implied that Mr. Roman had some sort of a shaky background and one should not pay any attention to the rumors. Low and behold, the rumors were true and the final result is the Denison Mines of today. The market letter writer subsequently wrote an apology to his subscribers when the find was validated. Just a little story that one should not think that just because one writes a market letter, or a column, one knows everything.
Some of you might have picked up on the missing link in this story, the lack of technical analysis. The stock price was moving, the confirmation of the uranium find came much later.
It appears that the intermediate term indicators are in the very early process of turning back to the up side, not yet fully turned but in the process. The weakest link seems to be the Index being some distance below its intermediate term moving average line. The line, by the way, has just entered the box zone. The momentum indicator broke below its trigger line yesterday but is back above its trigger today. The trigger line itself continues to slope upwards. An interesting note, very often one can draw better trend lines on the indicators than on the Index (or stock) itself. While we do not have any up trend line on the Index we do have one on the momentum indicator. The indicator has perked up and in the process of moving higher, above the trend line. Having said all that the rating unfortunately remains BEARISH.
On the short term we have a similar up trend line in the momentum indicator. Here, the momentum is actually bouncing off the trend line making a third point of touching for a stronger trend line. The momentum still remains below its neutral line and below its negative sloping trigger line so some more work is required here. The Index remains below its negative sloping moving average line but it could easily break above with another day of reasonable upside action. The very short term moving average has now moved below the short term average for a negative implication, but this too could change on one day’s activity. For now the short term rating remains BEARISH.
As for the direction of least resistance, well that is changing. As mentioned in earlier comments I really should stay with a lateral assessment as long as the Index stays in the box but the upper and lower boundaries are far enough away so that one might go with an up or down assessment. The aggressive Stochastic Oscillator has just moved above its oversold line for an indication of a rally in progress. Not a strong signal but a warning anyway. The action today suggests that the later part of the day had seen an upward movement in the Index. So, I’ll go with the direction of least resistance as being to the up side now.
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