for week ending 08 January 2010
Merv’s Daily Uranium Index
Market Data for Friday 08 Jan 2010
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.
We have always had a difference of opinion between the Weekly and Daily Indices. As you might have already noticed, the Weekly Index has made a significant upside break, above its several month resistance level. The Daily Index is still below its resistance level and remains in its box. What’s going on here? As I had mentioned on more than one occasion, the calculation of the Weekly Index is more attuned to the smaller more aggressive stocks while the calculation of the Daily Index is more attuned to the larger more conservative stocks. The aggressive stocks are moving and the Weekly Index reflects that. The Daily Index is expected to move also as its long term momentum indicator has moved into the positive zone into new bull market high territory. The Index can’t be far behind. The only restraining indicator at this time is the daily volume action. It is not at the level one would like to see it at if we were into a new roaring bull move. However, maybe the mass of the speculators have not yet returned from their vacations and another week might be different.
Unfortunately, it may be another week or two before we see the Daily Index enter new bull move highs. It is at the present time at the top of two separate up trending channels suggesting some rest period ahead. In addition, the short term momentum indicator is at a level from which we have had recent reactions. Any real strong upside move from here, by the Daily Index, would be very, very significant.
On Friday the Merv’s Daily Uranium Index closed on the up side by 1.01 points or 0.54% (the Weekly Index closed ahead 1.60% on the day). There were 25 daily winners, 19 daily losers and 6 going nowhere. The five largest stocks were mixed. Cameco gained 0.1%, First Uranium lost 2.4%, Paladin gained 0.7%, Uranium One lost 2.1% and Uranium Participation lost 0.4%. The best winner of the day was Xemplar Energy with a gain of 25.0% while the loser of the day was Pele Mountain with a loss of 7.4%. Market Vectors Nuclear Energy ETF gained 0.8%.
On a weekly basis, the Merv’s Weekly Uranium Index closed higher by 533.90 points or 9.30%. There were 42 weekly winners and 8 weekly losers. No stocks were left no knowing where they were going. Looking at the biggies, Cameco lost 2.0% on the week, First Uranium gained 6.1%, Paladin gained 7.2%, Uranium One gained 9.9% and Uranium Participation gained 2.4%. The best weekly winner was Xemplar Energy with a weekly gain of 52.8% while the loser of the week was Uracan Resources with a loss of 10.4%. Market Vectors Nuclear Energy ETF gained 4.7% on the week.
Although the long term Daily Index has not yet broken into new high ground confirming the Weekly Index move its various long term indicators are giving us a brighter story. Both the Weekly and Daily Indices are above their positive sloping moving average lines. Both long term momentum indicators are in their positive zones above positive sloping trigger lines. The Daily Index volume indicator was at new all time highs the other day but dropped just below the value towards the end of the week. Still, the volume indicator could be rated as positive and is above its positive trigger line. On the long term BOTH the Daily and Weekly Indices can now be comfortably rated as BULLISH.
For the intermediate term the Daily Index is above its moving average line and the line is sloping upwards. The momentum indicator is in its positive zone above its positive trigger line. However, the intermediate term momentum indicator is not really showing greater strength than the price movement itself. One likes to see the momentum showing underlying strength for the price move but this is not yet happening. Just a cautionary note. The volume indicator remains positive and is above its positive sloping trigger line. On the intermediate term the Daily Index is rated as BULLISH.
On the short term things are a little precarious, as mentioned earlier. The momentum indicator is at a point where we have had previous reactions in the Index. In addition there is that butting of heads `against two separate up trending channels. However, let’s just go with the indicators. The Index is above its positive sloping moving average line. The momentum indicator is way up there in its positive zone above its positive trigger line. The daily volume action is still lower than I would like but I’ll wait another week for it to respond to the recent upside moves. On the short term the rating remains BULLISH.
As for the immediate direction of least resistance, I think the Index could still climb a little more before reacting but its actions are starting to look weak. I will go with the lateral direction and see what happens.
As I have really been out of it for the past couple of weeks, and not yet fully recovered I haven’t had a chance to look through the individual stocks to gauge what’s going on. Hopefully, this coming week I will be able to look through the stocks and maybe show some interesting chart patterns. In the mean time you could do a lot worse than rummaging through the Weekly Table to see what is good or bad. Always remember, the shorter time periods should normally show what is coming up before the intermediate or longer time periods catch up.