Merv's Week-End Commentary, 22 Mar 2009

Merv’s Weekly Uranium Review
for week ending 20 March 2009

Merv’s Daily Uranium Index
Market Data for Friday 20 Mar 2009

Open: 141.37
Hugh: 150.26
Low: 135.93
Close: 144.02
Volume: 8641

Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.

We may finally be off and running, all we now need to confirm is a close above the 06 Jan 2009 high, at 158. For those not following these commentaries on a regular basis there is that point and figure (P&F) projection to the 300 level as a first step in this new bull market. That’s an Index move of 100% from these levels which should provide some stocks with even greater % moves. That channel has now been decisively broken so this should be the last day of its showing. Well, let’s get right to the analysis.

The Merv's Daily Uranium Index closed on Friday with another upside day. The Index gained 4.24 points or 3.03%. Although the Index was on the up side there were more individual stocks closing lower than higher. There were 19 winners, 24 losers and 7 going nowhere. Of those five largest stocks by market value, Cameco lost 1.8%, First Uranium gained 16.2%, Paladin lost 2.0%, Uranium One lost 2.0% and USEC gained 22.9%. The best daily winner was USEC with that 22.9% gain while the loser on the day was Uranium Resources with a daily loss of 31.8%.

As for the week as a whole, the Merv’s Weekly Uranium Index closed the week with a gain of 301.04 points or 9.09%. There were 32 stocks on the advance for the week, 15 on the decline and 3 unchanged. The weekly performance of the top 5 stocks by market value was quite encouraging. Cameco gained 8.7%, First Uranium gained 41.1%, Paladin gained 7.8%, Uranium One gained 10.2% and USEC gained 41.2%. The best weekly gained was Titan Uranium with a weekly gain of 93.5% while the loser of the week was Denison Mines with a weekly loss of 27.7%.

Things are starting to happen, even in the long term indicators. The Weekly Index closed above its long term moving average line although the line is still sloping downward. The same is the case when looking at the Daily Index long term moving average line. The long term momentum indicator remains in the negative zone but is moving upwards and is above its positive trigger line. As for the volume indicator, going over to the daily Index, it is now at its ALL TIME HIGH, above its positive long term trigger line. It is higher than when the Index reached its peak back in early 2007. Volume has been pointing the way and its all upward. The professionals have been buying stock for some months now and it looks like they have enough and are letting the prices advance. We’ll see over the next few weeks, but remember, nothing goes straight up so do not be surprised if the Index should take a rest sometimes soon. In the mean time with the improvement in the long term indicators the rating has started to improve. I can now rate the long term as + NEUTRAL, just one level below a full bull. I can’t remember when the last time it was that the rating was not in red.

The intermediate term is also improving. The Index continues to move away from its moving average line on the up side and the line continues to improve its upward slope. The momentum indicator moved above its neutral line on Thursday and on Friday moved into new recovery high level. It is above its positive sloping trigger line. As for the volume indicator, as mentioned above it is zooming into new all time highs and remains above its intermediate term positive trigger line. All in all there is no reason to change the rating. It remains BULLISH.

On the short term the moving average line is turning sharply upwards while the Index moves higher above the line. The momentum indicator is moving almost straight upwards and is very close to entering its overbought zone. It too remains above its positive trigger line. As for the daily volume action, that is improving. The last time we had daily volume as high as on Friday was over a month ago and that was on a down day, so things are improving from the daily volume activity. Short term is still BULLISH.

Now, the immediate direction of least resistance. The very short term moving average line has crossed above the short term line a few days back indicating the direction of motion remains upward. The aggressive Stochastic Oscillator is in its positive zone above its positive trigger line but still below its overbought line. All this might portent to good things immediately ahead. However, the action of the Index is starting to cause concern, from a very short term standpoint. The past few days of upside action, although moving higher, did not move as aggressively as one would hope. If you look at the daily range you will see that the Index closed very near its mid level of the range. This shows a hesitation to the upside move and could very soon cause the move to stall. It’s just a cautionary concern at this time but something to keep in mind. Even if a rest or reaction does take place it is not expected, at this time, to be anything to worry about. Still, I will go with the up side as the direction of least resistance and take it one day at a time.