Merv’s Weekly Uranium Review
for week ending 30 January 2009
Merv’s Daily Uranium Index
Market Data for Friday 30 Jan 2009
Open: 140.08
Hugh: 143.18
Low: 133.77
Close: 137.06
Volume: 6211
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
For the weekly Index this week I just though I’d show where we came from and how we stand after several years of calculating the Weekly Index. When we have a large difference between the chart high and low prices it is usually better to view the chart as a semi-log scale chart. However, I just thought I’d show it in its geometric scale for effect. Using the chart scale the Index went from a value of 1.0 at the start of 2003 to 145 in early 2007 and then down to 19 in late 2008 (an 87% drop). It now stands at 35.4, still 35 times what it was at the beginning of 2003.
Another week has gone by and the uranium stocks are still moving in a frustratingly lateral manner. The Daily chart shows the concept of a resistance becoming a support after it is breached quite well. The action for almost three weeks has been laterally moving right on top of that previous “box” resistance line. As mentioned previously we also have an up trending channel. This channel may prove to be the more significant pattern as the support just might get broken very soon but the move may only go to the lower channel support trend line. The reason I think that the “box” support line may get broken is because the short term momentum has now moved below its up trend line from the October low, although it is still just inside its positive zone. Momentum trend lines are very often better sources of trend and breaking of trend, than are trend lines drawn on the actual Index or stock price. But let’s get to the nuts and bolts of where we are.
The Merv’s Daily Uranium Index closed lower on Friday by 1.31 points or 0.94%. There were 15 winners, 29 losers and 6 going nowhere, so it was primarily a down day although not much of a downer. All five of the largest stocks by market value were bummers on Friday. Cameco lost 2.7%, Paladin lost 5.3%, Uranium One lost 6.6%, Uranium Participation lost 1.2% and USEC lost 2.1%. The best performer on the day was Globex Mining (which has had very little trading recently) with a gain of 14.6% while the worst performer on the day was Quaterra (another one with limited trading recently) with a loss of 19.1%.
As for the week as a whole the Merv’s Weekly Uranium Index closed the week with a loss of 42.37 points or 1.21%. There were 18 winners, 29 losers and 3 unchanged. For the five largest stocks Cameco lost 2.2% on the week, Paladin lost 8.7%, Uranium One lost 14.7%, Uranium Participation lost 4.1% and USEC lost 1.7%. As we see these five largest uranium stocks out performed (on the down side) the average loss of the Index as a whole. They were the drag this week. Despite the slow week there were three stocks with gains in the 40% range (you can see these in the weekly table). For the week the best performer was First Uranium with a weekly gain of 46.1% while the loser of the week was Western Prospector with a weekly loss of 22.5%.
So, how do things stand at the end of the week?
On the long term the Weekly Index is sitting just below its negative moving average line. Using the Daily Index, the Index is still some distance below its negative moving average line. As for the momentum indicator, it is moving in a lateral direction below its neutral line in the negative zone. From the daily version it has just moved below its horizontal trigger line. The long term continues to be rated as BEARISH.
As for the intermediate term, well with the Index moving in a very narrow range in a horizontal direction one can expect whip-saw effects here. For the intermediate term these potential whip-saw effects can be seen more on the momentum indicator. As for the Index, it is still some distance above its positive moving average line. The momentum and its trigger line are almost one and the same on the chart but in fact the momentum has crossed the trigger to the down side and the trigger is pointing lower. The momentum is, however, still above its up trend line from the October lows. As for the volume indicator, it took a sharp drop in the past couple of days but is still above its positive sloping trigger line. So, from this we get an intermediate term rating of + NEUTRAL today.
On the short term the Index and its moving average are almost one and the same. Today the Index is just below its negative sloping moving average line. The momentum indicator has been drifting in a somewhat lateral direction lately but with a negative bias. It remains above its neutral line in the positive zone but heading quickly towards the line. Unfortunately, the short term momentum indicator has just crossed its up trend line from the October lows. This is a serious event from the short term stand point and things must be watched carefully on a day by day basis. As for the daily volume action that continues below its short term average volume. This low volume activity is to be expected during a period of indecision such as the lateral move. All in all the short term is rated as BEARISH.
The immediate term direction of least resistance remains in a lateral direction until something happens to change that.
No comments:
Post a Comment