for week ending 18 December 2009
Merv’s Daily Uranium Index
Market Data for Friday 18 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.
To start I should admit to an error. The other day when updating my Indices I had made a minor error in the recalculation of the Daily Index. On Thursday it showed the Index worse than what it really was. The error was corrected.
Over the past few weeks readers have seen some idiots trying to entice readers into some scheme or other via the comments section. In my view these are all frauds and no reader should get involved with them. I don’t have the time to be continually monitoring these idiots and I find it difficult to delete some of them (lack of computer expertise). If I have done it correctly there will be no comments automatically posted until I have had the time to read them and if I think it is a normal comment, then have it posted. I don’t intend to censor any comments other than those from idiots trying to con the readers.
It’s been 8 months now that the Uranium Indices have been trapped inside a lateral box pattern. It is long past being frustrating waiting for something to happen. I guess it will take some well financed professionals to get into the uranium market with gusto and then everyone else will follow. Without the leadership of these professionals most markets just don’t have legs. Even when considering the more speculative stocks we still need the professional speculators in the act before things start to move. What’s holding them back? That’s the interesting question for which I’m not sure anyone has any real clear answer.
A lateral trend as we have had over these many months raises havoc with the technical indicators and ratings. We keep getting whip-sawed as the Index moves up and down above and below its moving average lines. The indicators are having a similar problem. So, although each day(or week-end) I may rate the Index for the various time periods one should understand that these ratings are somewhat automatic and could change with the next few day reversal of the Index. Until the Index moves out of the box and gets into a new trend one must take these ratings with the risk they hold.
The Merv’s Daily Uranium Index closed lower on Friday by 3.00 points or 1.67%. There were 27 winners, 17 losers and 6 going nowhere. With the ratio of winners to losers being so much on the winners side one wonders about the Index closing lower. The Daily Index favors the higher priced stocks so we only need a few movers in that group to overcome many minor moves in the lower priced stocks. Of the top 5 stocks by market value, Cameco lost 2.4%, First Uranium gained 1.8%, Paladin gained 1.3%, Uranium One lost 5.6% and Uranium Participation gained 0.5%. The best winner of the day was JNR Resources with a gain of 22.7% while the loser of the day was Uranium One with that loss of 5.6%. The Market Vectors Nuclear Energy ETF and the Global Uranium Fund seen to be going in different directions. Market Vectors gained 0.4% while Global Uranium lost 2.0%.
As for the week as a whole, the Merv’s Weekly Uranium Index closed the week with a weekly loss of 26.86 points or 0.49%. There were 21 weekly winners, 25 weekly losers and 4 going nowhere. Cameco lost 2.4%, First Uranium gained 1.4%, Paladin gained 6.3%, Uranium One lost 4.6% and Uranium Participation gained 1.8%. The best weekly performer was JNR with a weekly gain of 17.4% while the worst weekly performer was Tournigan Energy with a loss of 15.8%. Market Vectors lost 1.7% while Global Uranium gained 1.7%.
Nothing has changed from the long term perspective. We still have both the Daily and Weekly Indices above their positive sloping moving average lines. We still have a difference of opinion between the long term Daily and Weekly Indices momentum indicators. The Weekly Index momentum indicator continues just above its neutral line while the Daily Index momentum indicator continues just below its neutral line. The volume indicator is showing signs of weakness but is still slightly above its positive trigger line. Because of the momentum indicator the Daily Index should be rated as + neutral on the long term but I’ll rate both Indices the same, as still BULLISH.
Things are getting difficult for the intermediate term. The Daily Index has moved below its moving average line and the line has turned negative by barely a hair. The momentum indicator is pointing downward aggressively but is still just above its neutral line in the positive zone. The indicator is below its negative trigger line. As for the volume indicator, it has just moved below its trigger line but the trigger is still pointing upwards. All in all, the rating has once more turned into the BEARISH camp. The short term moving average line has not yet moved below the intermediate term line and confirmation of the bear has not yet been made by these indicators.
On the short term you can guess how things are playing out there. The Daily Index is below its negative sloping moving average line. The momentum indicator is moving lower and is in its negative zone below its negative trigger line. The daily volume action remains quite low as one might expect with the kind of daily activity lately. On the short term the rating continues as BEARISH.
As for the immediate direction of least resistance, I think I’ll remain in my lateral mode. Although the direction of action seems to be to the down side there are a few support levels that may halt the decline. Unless we are into a new downside major trend the action does not seem to have much downside left before rebounding.