for week ending 22 January 2010
Merv’s Daily Uranium Index
Market Data for Friday 22 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.
Sure glad that week’s over. What, oh what went wrong? Gotta put the blame on someone. Bush is to blame. Ah sucks, Bush is no longer in the White House. We will just have to blame the new guy but I guess we should give him some slack, after all he IS just in training.
The plunge started on Wednesday and closed on Friday below its four and a half month up trend line. We are still in that box shown in the longer term daily chart posted earlier but there is a lot of space until we get to the lower support level. I guess as long as it remains a support we should not be too unhappy.
The Merv’s Daily Uranium Index closed on Friday with a loss of 1.24 points or 0.70%. There were 20 winners on the day, 22 losers and 8 stocks spinning their wheels. As for those five largest stocks, Cameco lost 1.6%, First Uranium lost 3.5%, Paladin gained 1.1%, Uranium One gained 2.4% and Uranium Participation lost 1.3%. The best winner on the day was NWT Uranium with a gain of 10.7%. The worst loser on the day was CanAlaska Uranium with a loss of 8.3%. Market Vectors Nuclear Energy ETF lost 1.1%.
For the week as a whole the Merv’s Weekly Uranium Index closed lower by 365.42 points or 5.82%. There were only 7 weekly winners, 40 weekly losers and 3 stocks spinning their wheels. No surprise but all the top five stocks were weekly losers. Cameco lost 3.0% on the week, First Uranium lost 23.1%, Paladin lost 5.1%, Uranium One lost 1.7% and Uranium Participation lost 2.2% on the week. The best winner during the week was NWT Uranium with a weekly gain of 24.0% while the worst loser of the week was Continental Precious Metals with a weekly loss of 25.4%. Market Vectors Nuclear Energy ETF lost 6.4% on the week.
Once more we are starting to get a real difference of opinion between the Daily and Weekly charts as far as the long term indicators and ratings are concerned.
From the Weekly chart and indicators, representing the smaller stocks in the Index, we get an Index still above its long term positive sloping moving average line. Although moving lower the momentum indicator is still in its positive zone. The Weekly Index can still be considered as BULLISH from the long term.
From the Daily chart and indicators, representing the larger quality stocks, we get an Index that is now below its long term moving average line although the line is still slightly positive. The momentum indicator has once more dropped into its negative zone and is below its negative trigger line. The volume indicator has now dropped below its long term trigger line although the trigger remains slightly positive. The Daily Index is rated as now back to a BEARISH rating.
On the intermediate term everything has now fallen apart. The Index closed below its negative sloping moving average line. The momentum indicator dropped into its negative zone below its negative trigger line. The volume indicator is heading downward and has moved below its negative sloping trigger line. All in all, the intermediate term rating can only be BEARISH. The only saving grace is that the short term moving average line has not yet confirmed this bear and remains some distance above the intermediate term moving average line (but closing in).
With three days as we have had there should be no surprise that the short term is down the drain. The Index is way below its short term moving average line. The momentum indicator is deep inside its negative zone but not quite yet into its oversold zone. It is below its negative trigger line. The daily volume is perking up a little each day but unfortunately these are on down market days. The short term can only be rated as BEARISH.
The immediate direction of least resistance should be easy today. However, the Stochastic Oscillator has now entered its oversold zone and a reversal could be expected anytime. The candlestick on Friday suggests an action that often leads to a reversal of trend within a day or two. So, the upside just might be the more appropriate direction of least resistance. I’ll go with my more common lateral direction for Monday.