BASIC NOTES

Uranium Companies

There are very few pure uranium companies. Most companies, especially the small exploration type, are active in more than the uranium industry. This blog makes no attempt to guage the percentage of a companies activity that are related to the finding, mining or processing of uraniun. They all do, however, have some uranium activities (to the best of our review).

Merv's Uranium Indices

I have developed two Uranium Indices. They each have the same component stocks but are calculated using different methodologies. My weekly Index is based upon the average weekly performance of the component stocks. My daily Index is based upon the daily average of the component stocks open, high, low and close prices along with the daily average volume of all component stocks.

Click on the chart or table to enlage the view.



04 October 2009

Merv's Weekly Commentary 04 Oct 2009


Merv’s Weekly Uranium Review
for week ending 02 October 2009

Merv’s Daily Uranium Index
Market Data for Friday 02 Oct 2009

Open: 160.66
Hugh: 165.63
Low: 157.56
Close: 162.42
Volume: 4169

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

Note that additional charts of the Daily and Weekly Indices were posted earlier and should be viewed during this commentary.

Things one misses that are right before his eyes. Technical analysis is not perfect, no security analysis is, but usually one can get a warning of upcoming market changes using technical techniques. A couple of weeks back the Daily Index was breaking above a well defined resistance level. It was a false move as we see. Was there any technical warning of the false move? Well, I missed it and it was right there in front of my eyes. Looking at the Stochastic Oscillator, it was giving a clear warning that the break out move was under performing and weak, and it was right. Oh well, we can’t always see all the warning signs all the time, to paraphrase some old saying.

So, what is the Stochastic Oscillator telling us today? It seems that the plunge of the past few days may not be as bad as the Index decline suggests. The SO has been moving in a basic lateral path as the Index moves lower. This may be seen as opposite to the movement at the resistance break. It’s not as strong of an indication but does suggest that maybe the downside has been overdone and we may be in for a rally or at least some lateral move.

The Merv’s Daily Uranium Index closed on Friday with a loss of 1.25 points or 0.76%. Here again, the closing price alone does not tell the whole story. The Index opened lower, continues even lower early in the day, then reversed and move higher closing above the opening price but still slightly below the previous day’s close. How should one read this, a down day because the close was lower than the previous close or an up day because it rallied at the end of the day to close above its opening price? I’ll leave that with you. There were 11 winners on the day, 28 losers and 11 going who knows where. As for those five largest stocks by market value, Cameco lost 1.2%, First Uranium didn’t know where it was going, Paladin lost 3.2%, Uranium One gained 0.8% and Uranium Participation gained 1.3%. The best daily performer was Kodiak with a gain of 5.4% (WOW) while Bannerman was the loser on the day with a loss of 8.6%.

For the week as a whole the Merv’s Weekly Uranium Index lost 161.50 points or 3.07%. There were 9 weekly winners, 38 losers and 3 going nowhere. Cameco lost 6.9%, First Uranium lost 2.8%, Paladin lost 3.8%, Uranium One gained 5.5% and Uranium Participation lost 2.0%. The best weekly winner was Freewest Resources with a gain of 31.3% while the worst weekly loser was Denison Mines with a loss of 18.2%.

One of the problems with having more than one Index to look at is that they may not agree, so which one to believe? For the long term the Weekly Index remains above its positive sloping moving average line while the Daily Index is below its long term moving average line. The Daily Index line is, however, still slightly sloping upwards but not by much. The weekly momentum indicator is still slightly above its neutral line in the positive zone. The Daily Index momentum remains in its negative zone where it has been for a long time, and remains below its negative trigger line. The volume indicator has been moving lower these past few weeks with the Index and is below its negative sloping trigger line. It has just reached its lowest point in 5 months ahead of the Index breaking below its July low. There is just too much difference between these two Indices so I’ll have to break the long term rating into two parts. The Weekly Index, more attuned to the speculative stocks, is still rated as BULLISH. The Daily Index, more attuned to the quality stocks, is rated as BEARISH. This should change one way or the other in the next week or so.

As for the intermediate and short term ratings, these I must use the Daily chart and indicators as a weekly data chart is not very accurate for those time periods.

On the intermediate term the Daily Index is below a now negative sloping moving average line. The momentum indicator has dropped into its negative zone and is below its negative sloping trigger line. The volume indicator is also below its negative sloping trigger line. The intermediate term rating can only be BEARISH with these indicators. The short term moving average line has not quite crossed the intermediate term line for confirmation of the bear, but that may only be another day or so.

On the short term the Index is below its negative sloping moving average line and the momentum indicator is in its negative zone below its negative trigger line. The daily volume is contracting with the negative Index move but this is a normal occurrence and does not indicate anything in particular. All in all, the short term rating is BEARISH.

As for the immediate direction of least resistance, I’ll go with the Stochastic Oscillator and stick to the lateral direction.

No comments: