for week ending 04 December 2009
Merv’s Daily Uranium Index
Market Data for Friday 04 Dec 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.
The longer term charts posted earlier clearly show the box that the Daily and Weekly Indices have been in for most of this year. The uncertainty and frustration must be putting many speculators off the uranium stocks. Looking over the charts there is nothing that really jumps out at me to turn overly bullish or bearish. Yes, I know about the Index lows getting higher and higher since July. This is encouraging but not yet something to generate any great excitement. In addition, I have drawn a short term set of FAN Principle trend lines on today’s chart. This is what I call a Merv’s (everything is a Merv’s) Decelerating Bullish Fan. Decelerating Bullish and Bearish Fans have a common apex point from which all three fan trend lines are drawn. My criteria for the decelerating fans are that the crossing of the first fan trend line is of little consequence. The crossing of the second fan gives us the trend reversal signal and the crossing of the third fan is a confirmation of the reversal. On rare occasions there may be a fourth fan. The real trick is to get the trend lines right. I have drawn the three trend lines but must admit that they are not very precise. Anyway, this is one possible indication that we are on a roll and the trend is up. It is not unusual for the action to hug the trend line before really moving in its supposed direction. Although there is no real criteria as to the possible extent of the move I usually look for the move to go back to at least the apex point. Let’s see what happens here. In the mean time, back to the usual indicators.
The Merv’s Daily Uranium Index closed on Friday slightly on the down side (but still staying above the third fan trend line). The Index fell 1.60 points or 0.88%. There were 12 winners, 25 losers and 13 totally confused. I never like to see this many stocks going nowhere. I’d sooner like to see them going up or down, that gives me a better idea as to what may be happening. As for the five largest by market value, they were all in the loser’s column. Cameco lost 0.9%, First Uranium lost 7.1%, Paladin lost 1.7%, Uranium One lost 1.0% and Uranium Participation lost 1.0%. The best winner of the day was RPT Uranium with a gain of 6.7% while the loser of the day was Terra Ventures with a loss of 9.1%. Market Vectors Nuclear Energy ETF lost 0.5% on the day.
For the week as a whole, the Merv’s Weekly Uranium Index closed higher by 135.60 points or 2.48%. There were 25 weekly winners, 22 losers and 3 going nowhere. The five largest stocks were mostly higher on the week. Cameco gained 7.5%, First Uranium lost 3.3%, Paladin gained 0.8%, Uranium One gained 2.6% and Uranium Participation gained 1.3%. The best weekly winner was Freewest with a gain of 37.5% while the worst weekly loser was Uranerz with a loss of 10.3%. Market Vectors Nuclear Energy ETF gained 4.2% on the week.
The basic situation we have had since the Indices went into their box pattern in late April continues. Both the Weekly and Daily Indices remain above their respective positive sloping moving average lines. The Weekly Index momentum remains just above its neutral line while the Daily Index momentum remains just below its neutral line. The volume indicator has not shown any significant strength versus the Index action but is slightly above its trigger line. Since the major trend identifier is the moving average and both Indices are above their lines I will continue to call the long term rating as BULLISH (although the Daily Index may be a step or so below a bullish rating due to the negative location of the momentum indicator.
As far as the intermediate term is concerned, the action is so boring that the best we can go by IS the normal indicators. The Daily Index is above its positive sloping moving average line although not much above. The momentum indicator is just inside its positive zone and above its positive trigger line. The volume indicator remains blah but above its positive trigger line. All in all, the intermediate term rating remains BULLISH.
On the short term the indicators are similar to the intermediate term. The Daily Index is above its positive moving average line but not by much. The momentum indicator remains just inside its positive zone above its positive trigger line. The daily volume action is what one might expect. During the first part of the week as the Daily Index was in a climbing mood the daily volume was above its short term (15 day) average while during the later part of the week with the Index on the down side the volume shrank below the short term average. The short term rating remains BULLISH at the present time.
As for the immediate direction of least resistance, the Stochastic Oscillator entered its overbought zone on Thursday and dropped below the overbought line on Friday. It also moved below its trigger line although the trigger is still pointing upward. This action by the SO usually suggests some downside activity ahead. I think that the FAN trend line may limit the down side and we might be in for more of a lateral move, so, lateral is my guess for the next few days. I don’t see the Index closing above Thursday’s high point in the next few days.