Merv's Daily Commentary 27 Oct 2009

After The Close, 27 Oct 2009

Merv’s Daily Uranium Index
Market Data

Open: 180.03
High: 181.43
Low: 172.85
Close: 175.92
Volume: 5005

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

I command thee to halt this foolishness and get on with the job of creating profits for speculators. THAT ought to do it.

Another day and another downer. We are just about where I would expect the Index to halt and take a breather. It could still go a lot lower, to the 160 level by the P&F chart, or more precisely, the 150.01 level. Below there and we are back into a P&F bear market per this chart. A reversal of P&F direction, as opposed to reversal of trend, would require 170.00. We were close today but missed it by almost 3 points.

The Merv’s Daily Uranium Index closed lower by 3.89 points or 2.17%. There were 15 winners, 32 losers and only 3 that didn’t know where they were going. Cameco lost 3.3%, First Uranium lost 3.0%, Paladin lost 3.6%, Uranium One gained 0.3% and Uranium Participation lost 2.0%. The best performer was RTP Uranium with a gain of 13.3% while the worst performer was Titan Uranium with a loss of 13.7%. Market Vectors Nuclear Energy ETF lost 1.6%.

The chart and indicators are moving lower in the intermediate term but have not yet reached a point where it affects the intermediate term rating. The Daily Index moved below its moving average line during the day but still closed above the line in the end. The moving average remains sloping in an upward direction. The momentum indicator is pointing almost straight down and is below its negative trigger but still remains slightly in its positive zone. The volume indicator is also moving downward but closed the day just above its positive trigger line. Putting it all together the intermediate term rating remains BULLISH. However, another day or two of this downside action and this rating may start to become downgraded.

I went bearish on the short term yesterday and the indicators have just gotten a little more negative. The Index is below its negative sloping moving average line while the momentum indicator has entered its negative zone below its downward sloping trigger line. The daily volume action remains low, as one would expect with the downside Index action. The short term rating remains BEARISH.

As for the immediate direction of least resistance, the Stochastic Oscillator has entered its oversold zone which suggests that a reversal of direction, or at least a rest period, is close on hand. It may even come tomorrow. This indicator has seen the Index rally each time it has dropped into its oversold zone. I will go with the up side tomorrow. I know, uranium has moved another notch higher today (by $1.75) so one might expect a rise in the stocks but things don’t happen like that all the time. I will go with my reading of the indicators, and especially the Stochastic Oscillator, for the immediate direction.