Merv’s Weekly Uranium Review
for week ending 23 January 2009
Merv’s Daily Uranium Index
Market Data for Friday 23 Jan 2009
Open: 135.40
Hugh: 142.11
Low: 132.41
Close: 138.59
Volume: 3527
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
Not much has happened during this past week. The Weekly Index barely moved by the end of the week although it was a little higher. So let’s just get to it.
The Merv’s Daily Uranium Index closed on Friday with a daily gain of 1.29 points or 0.94%. There were 21 winners, 20 losers and 9 going nowhere. You could say it was a stand-off. As for those five largest stocks, there was little action there. Cameco gained 0.3%, Paladin gained 1.2%, Uranium One gained 0.5%, Uranium Participation lost 2.2% and USEC gained 0.2%. Add the gains and losses here and we get another stand-off. The best winner of the day was Energy Fuels with a gain of 16.7% while the worst loser on the day was Bannerman with a loss of 16.7%, another stand-off. It was just that kind of day.
Going to the whole week, the Merv’s Weekly Uranium Index closed higher by 10.02 points or 2.88%. For the week there were 26 winners, 23 losers and one unchanged. Almost a stand-off. Going to the top five stocks by market value, Cameco lost 4.4%, Paladin gained 2.4%, Uranium One gained 4.3%, Uranium Participation gained 2.0% and USEC lost 3.5%. The best weekly performer was Energy Fuels with a weekly gain of 27.3% while the loser of the week was Bannerman with a loss of 27.5%.
Looking at the long term, the weekly chart shows the Index just below its negative sloping long term moving average line. However, if we look at the Daily Index we see the long term moving average still a little distance above the Index. In either case the Index remains below the moving average line. The momentum indicator also remains in its negative zone and seems to be leveling off for now. The long term rating remains BEARISH.
The Daily Index has been moving in a lateral path for several days now but remains above its positive sloping moving average line. Drawn on the Daily chart is a pennant (triangular) pattern. This is usually considered a continuation pattern as the activity is inclined to break in the direction it was going at previously. The Index should break out in the next day or two otherwise the pattern becomes null and void and we are back into a lateral or down move. The momentum indicator continues to drift horizontally just below its neutral line and just below a basic lateral trigger line. The volume indicator continues to show some strength and remains above its positive trigger line. The best rating I can give the intermediate term is a continuation of the + NEUTRAL rating.
On the short term the Daily Index remains below its now negative sloping moving average line. The momentum indicator is still in its positive zone but heading lower and remains below its negative trigger line. Although heading lower the indicator does seem to be leveling off slightly so we might be close to a reversal soon. The daily volume action remains what one would expect during a reaction in an up trend. So, although we might see some encouragement in the indicators their summation still gives me a BEARISH rating at this time.
As for the immediate direction of least resistance, that would continue to be to the lateral. We have been essentially in a lateral direction for the past two weeks.
Looking at a blow-up of the daily chart and indicators I have a strong “feeling” that Monday should see the start of a new upward thrust in the Index. I may be off by a day or so but the indicators just seem to be starting a turn around although they are not quite there yet. This is what those of us who think we know what we are talking about do. We make bold predictions and then provide all sort of cop-outs so that if we are wrong we can always point to the cop-out. On the other hand if the bold prediction comes true you will never hear us mention the cop-out.
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