Merv’s Daily Uranium Index
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
The yo-yo roller coaster continues. Another down day in the markets. Uranium price was no big help having dropped another $0.50 after a nice rise last week. At least it didn’t drop by dollars. The action in the Daily Index remains trapped in its box and I don’t see it getting out anytime this week. Today’s action may have nullified the previous short term bullish FAN Principle as it closed below the third FAN trend line and is back inside the area between the second and third trend lines. Give it another day to see if it stays inside that zone or if it pops out above the line again. I have just drawn the third FAN trend line and left out the other two today, lazy and all that.
The Merv’s Daily Uranium Index closed lower by 4.24 points or 2.36%. There were only 4 winners today. There were 37 losers and 9 going nowhere. All of the five largest stocks closed lower, well not all, one went nowhere. Cameco lost 4.7%, First Uranium lost 3.7%, Paladin went nowhere, Uranium One lost 2.2% and Uranium Participation lost 2.2%. The best winner out of the four was USEC with a gain of 6.3% while the loser of the bunch was Terra Ventures with a loss of 12.9%. Market Vectors Nuclear Energy ETF lost 1.2%.
How quickly things change when you’re not looking. The Daily Index closed below its intermediate term moving average line and the line in turn turned oh so gently downward. The momentum indicator is still in its positive zone but moving lower fast. It is below its trigger line and the trigger is sloping downward. The volume indicator remains in a basic lateral trend although it is still above its positive sloping trigger line. Putting it all together the intermediate term rating has suddenly gone BEARISH. This happens quite fast, as we see, when the basic trend is in a long lateral direction and small moves cause indicators top change quickly.
On the short term things are no better. The Daily Index has moved below the short term moving average line and the line has turned downward. The momentum indicator has now moved into its negative zone below its negative trigger line. The daily volume action was weak today, below its 15 day average volume. This is as expected. For the short term the rating has now gone BEARISH.
As for the immediate direction of least resistance, The Stochastic Oscillator has now gone into its negative zone and one might expect some more downside action. There is a good support trend line not far below the action and this gives rise to the possibility of a turn around or bounce in the Index but I’ll remain with my lateral guess for the next day or so.