Merv's Daily Commentary 27 May 2009

After The Close, 27 May 2009

Merv’s Daily Uranium Index
Market Data

Open: 180.96
High: 184.36
Low: 174.75
Close: 177.45
Volume: 14066


Note that the volume is an average volume of round lot sales for the 5 0 component stocks. For total volume, multiply by 5000.

Boy, the damage that one stock can do. The fiasco with Uranium One sure shook up the uranium markets today. From what I’ve read this all should be short lived as far as impact on the stocks is concerned (except for Uranium One, of course). More than two thirds of all the day’s volume activity was due to that one stock and should be kept in mind when looking at volume data.

Despite the upheaval the Daily Index remains inside its box. We’ll see how things transpire over the next few days.

The Merv’s Daily Uranium Index closed lower by 3.69 points or 2.04%. Actually, not too bad when reflecting upon the downside action generated by Uranium One. There were 16 winners on the day, 29 losers and 5 just sitting there. As for the top five stocks by market value, they were all losers. Cameco lost 1.3%, First Uranium lost 0.1%, Paladin lost 0.5%, Uranium One lost 39.5% and USEC lost 3.7%. Actually, not really such a bad day, excluding one stock. The best daily performer was Purepoint Uranium with a gain of 9.1% while the loser of the day --- drum roll -- was Uranium One with that loss of 39.5%.

The intermediate term continues without change. The Index remains above its positive moving average line and the momentum indicator remains in its positive zone, although below its negative trigger line. The volume indicator remains way up there and above its positive trigger line. On the intermediate term the rating remains BULLISH.

As for the short term, well the Index is now decidedly below its moving average line with the line sloping downward. The momentum indicator remains just inside its positive zone but moving lower below its negative trigger line. One can’t really tell much from the volume indicator due to the heavy single stock volume. The short term must be classified as BEARISH today.

As for the direction of least resistance, well that should be to the down side, although I’ll continue with the lateral as the down side doesn’t really seem to have much strength behind it.