Merv’s Weekly Uranium Review
for week ending 06 March 2009
Merv’s Daily Uranium Index
Market Data for Friday 06 Mar 2009
Open: 125.75
Hugh: 129.54
Low: 121.55
Close: 125.75
Volume: 4518
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
Well, there’s no getting away from it. Despite the minor ups and downs of the Indices they are now definitely in downward moves being below all of their major moving average lines. Both the Daily and Weekly are below support levels and would need some rally before they could be seen as having reversed the trend. Of course we could look ahead and see the next major support, at the previous bottom, and convince ourselves that THAT support will hold but I would not put money on it. I would wait for an actual reversal to set in before risking money. There are always individual stocks that may be moving counter to the Indices but that’s for the extra risk taker. During a bear market the good get taken along with the bad, it may only take more time for them to get taken. There is still that P&F projection to the 50 level that has not been completely nulified.
Speaking of the P&F chart, it looks like the P&F was right on in not signaling a bull market during this recent advance. As you may recall, although the Xs broke above two previous highs the move DID NOT break above the down trend line. Both requirements are needed for a trend reversal to be confirmed, according to my criteria. Any reversal from here with a move into new rally highs should do it but I’d wait for it to happen.
The Merv’s Daily Uranium Index closed on Friday on a downer, but again not by much. If we start to accumulate these “not by much” moves we will suddenly have a very much move. The Index closed lower by 0.68 points or 0.54%. There were 15 daily winners, 28 losers and 7 going nowhere. As for the five largesy stocks, they were mixed. Cameco gained 0.6%, Paladin gained 5.9%, Uranium One lost 7.0%, Uranium Participation lost 3.1% and USEC lost 3.4%. The best winner on the day was Freewest Resources with a gain of 16.0% while the worst daily loser was Wescan Goldfields with a loss of 11.6%.
On the week as a whole, the Merv’s Weekly Uranium Index closed lower by 223.60 points or 6.60%. There were only 8 weekly winners, 38 weekly losers and 4 unchanged. Cameco lost 2.4% on the week, Paladin lost 3.3%, Uranium One lost 10.4%, Uranium Participation lost 1.7% and USEC lost 33.0%. The best winner on the week was Vena Resources with only an 8.3% gain while the loser of the week was the previously mentioned USEC with a 33.0% loss.
Going to our Weekly chart for our long term prognosis we see that nothing is well. The Index is once more below its long term moving average line and the line is sloping downward. This is confirmed by the same situation in the Daily Index. The momentum indicator remains in its negative zone and moving lower. The long term rating therefore remains BEARISH.
On the intermediate term there is also no good news. Although the action remains inside that downward sloping channel and the most likely break-out would be to the up side the Index remains at the lower levels of the channel, a long way to the up side break. The Index remains below its negative sloping moving average line. The momentum indicator remains in its negative zone below its negative trigger line. Although moving lower neither the price nor the momentum are moving in any aggressive manner. The volume indicator remains the only somewhat positive indicator and remains above its positive trigger line. It is, however, moving downward and could cross its trigger in a matter of days. For now, however, I must remain BEARISH as far as the rating is concerned.
On the short term, here too nothing encouraging as far as the normal indicators are concerned. The Index is below its negative moving average line and the momentum indicator is in its negative zone below its negative trigger line. As I have mentioned before, the daily volume action is still pretty low but to be expected in a down trending market. We have a short term downward sloping channel (not shown on the chart) with an upside break here at the 132 level. A close at or above the 132 mark may be the start of the next uptrend. However, on the short term the rating also remains BEARISH.
As for the immediate direction of least resistance, that would be continuing the lateral direction. As mentioned the other day, the Index does not seem to be in any hurry to get anywhere. Looking at the aggressive Stochastic Oscillator, it seems to be showing some underlying strength not seen in the Index. The low reached by the Index during the week has not yet been confirmed by the SO. Let’s see if this develops into anything.
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