for week ending 15 January 2010
Merv’s Daily Uranium Index
Market Data for Friday 15 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.
It was a neutral kind of uranium market this past week. The Weekly and Daily Indices may have lost a minor amount but looking at the chart I would call the week’s action as a lateral drift. It was basically marking time.
We still have that disconnect between the Weekly Index and the Daily Index. Looking through the Table of Technical Information one can see the difference between the two classes of stocks, the larger stocks represented by the Daily Index and the smaller stocks represented by the Weekly Index. If you look at the Relative Strength (RS) ratings of the component stocks you will see in general that the larger stocks have ratings that put them in the bottom half of the list with RS ratings generally greater than 25. The smaller the RS number the better its performance has been during the stated time period. The larger stocks are just not performing as well as the smaller stocks are. I would expect this to continue into the future. The larger stocks should still do okay but not as well as the more aggressive smaller stocks, percentage performance wise.
Another interesting feature of the chart today is the up trending channel. Although the Daily Index had broken below the short term up trending channel shown here some time back it is still inside the intermediate term up trending channel. So, one can continue to view the action as continuing bullish as long as the Index stays inside the channel. Unfortunately, inside the channel is lots of space to move up or down and for now it looks like the direction is more down than up.
The Merv’s Daily Uranium Index closed on Friday a little on the down side. It was lower by 1.40 points or 0.74%. There were 16 winners, 24 losers and 10 stocks going who knows where. There was one winner among the five largest stocks. Cameco lost 2.7%, First Uranium lost 0.4%, Paladin lost 2.8%, Uranium One was the one winner with a gain of 4.6% on the day while Uranium Participation lost 1.8%. The best daily winner was Fronteer Development with a gain of 13.2% while the loser of the day was NWT Uranium with a loss of 7.4%. Market Vectors Nuclear Energy ETF lost 0.8%.
On the week as a whole the Merv’s Weekly Uranium Index gained 1.11 points or 0.02% (the Daily Index lost 1.45% for the week). There were 18 weekly winners, 30 weekly losers and only two stocks not knowing where they were going. Cameco lost 6.6% on the week, First Uranium gained 2.9%, Paladin lost 7.2%, Uranium One gained 3.9% and Uranium Participation lost 5,5%. The best weekly performer was Blue Sky Uranium with a weekly gain of 33.8% while the worst performer was Xemplar Energy with a weekly loss of 16.4% flowed very closely by Ucore Uranium with a loss of 16.3%. Market Vectors Nuclear Energy ETF lost 0.1% on the week.
The long term momentum discrepancy between the Weekly and Daily Indices was resolved the other week but now we have that resistance level discrepancy in the price chart. The Daily Index is still below its resistance level while the Weekly Index had broken above its resistance and remains above. However, the long term direction of the two Indices are the same. Both Indices remain above their long term positive sloping moving average lines. Both Indices have their long term momentum indicators in their positive zones. The volume indicator, although showing some weakness, remains above its positive trigger line. Both Indices may be rated as BULLISH from the long term perspective.
The intermediate term is starting to show weakness but not yet in danger of a reversal of trend. The Daily Index remains above its positive moving average line. The momentum indicator is still in its positive zone but moving lower and has already dropped below its trigger line. The trigger has also just turned to the down side. The volume indicator is sitting right on top of its trigger line ready to drop below the line any day now. Despite some weakness the intermediate term rating remains BULLISH for now.
As for the short term, that is another story. The Daily Index closed on Friday just below its short term moving average line. The line is still very, very slightly pointing upward but that could change quickly. The momentum indicator remains in its positive zone but heading lower. It is below its negative sloping trigger line and has been there all week. The daily volume activity is still pretty low although Friday’s volume was significant due to high Paladin volume, unfortunately on the down side. The short term rating has been down graded to a – NEUTRAL rating, one level above a full bear.
As for the immediate direction of least resistance, I see no reason to change from my lateral guess. The action over the past week has been basically lateral and I can see it continuing.