for week ending 13 November 2009
Merv’s Daily Uranium Index
Market Data for Friday 13 Nov 2009
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.
Regardless of which Index you use we ended the week about where we started. The Weekly Index lost a fraction of a point while the Daily Index gained a fraction for the week. Looking at the Daily chart it looks like a roller coaster for the past several months. The year started on a good note but about May the stocks hit a ceiling and stalled. Sooner or later the stocks will get going again. It’s hard to imagine that the next trend will be anything other than a bull trend but who knows, stranger things have happened so it’s always good to wait for the trend to establish and THEN go with the flow.
I’m often asked if one should wait for “the MARKET” to confirm a trend or if just checking the individual stock is good enough. The point here is that by time the market as a whole confirms a trend many individual stocks could have already made major moves. In the end one must go with the confirmation of the individual stock. Whether one does so prior to a market confirmation depends upon ones risk aversion ability. If you go with a stock confirmation prior to the market having confirmed the trend then you are accepting additional risk that the market may not confirm the trend and the stock trend could quickly reverse. You might want to maintain an aggressive stop loss in such a case. You pays your money and you takes your chances.
The Merv’s Daily Uranium Index closed on Friday with a gain of 1.25 points or 0.72%. There were 20 winners on the day, 23 losers and 7 just stumbling around. Of the 5 largest stocks, Cameco gained 0.3%, First Uranium gained 0.4%, Paladin lost 0.5%, Uranium One gained 4.3% and Uranium Participation lost 0.7%. The best winner of the day was Ucore Uranium with a gain of 11.1% while the loser of the day was Continental Precious with a loss of 9.0%. Market Vectors Nuclear Energy ETF gained 1.6% on Friday.
For the week as a whole, the Merv’s Weekly Uranium Index closed down by 3.88 points or 0.1%. There were 23 weekly winners, 22 losers and 5 doing a song and dance. Cameco lost 0.6% on the week, First Uranium lost 14.5%, Paladin gained 1.0%, Uranium One gained 8.7% and Uranium Participation lost 3.9%. The winner of the week was Terra Ventures with a gain of 25.0% while the loser of the week was Formation Metals with a loss of 16.9% (they consolidated their stock on a 1 for 7 basis this week). Market Vectors Nuclear Energy ETF gained 1.9% on the week.
The long term remains as it has been for some time now. The Weekly and Daily Indices are above their positive moving average lines while their momentum indicators are on different wave lengths. The Weekly long term momentum is in its positive zone while the Daily long term momentum indicator remains in its negative zone. As for the volume indicator it continues in its lateral path but is above its positive trigger line. I’ll split the ratings again this week by giving the Weekly Index a BULLISH long term rating while giving the Daily Index a + NEUTRAL rating.
On the intermediate term we have the Daily Index at almost the same level as its positive moving average line. They are right on top of each other at the close. The momentum indicator remains in its positive zone and is just a hair above its barely positive trigger line. The volume indicator remains just above its positive trigger line. All in all I will call the intermediate term as BULLISH.
On the short term the Index fell below its moving average line on Thursday but closed just above the line on Friday. The moving average line is sloping in a gentle upward direction. The momentum indicator is in its negative zone right on top of a slightly positive sloping trigger line. The daily volume action is not all that encouraging. It was lower than on Thursday despite a positive Index day. It was also lower than its 15 day average volume line. Despite the volume action the other indicator provide a still BULLISH short term rating.
On the immediate direction of least resistance it looks like the few days of negative trend are over and the Stochastic Oscillator appears to want to turn back to the up side. It is in its negative zone still heading lower but the slope seems to be on the verge of changing. I’ll go with the up side for the next few days.