for week ending 12 February 2010
Merv’s Daily Uranium Index
Market Data for Friday 12 Feb 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’s been a relatively quiet week with the weekly Index gaining only 0.26% while the Daily Index gained 1.31%. Although the Weekly Index did make a break-out a few weeks back it is once more firmly “boxed” in and below its previous several month resistance level. The Daily Index has been firmly “boxed” in during this same period without a break-out.
In the 7 years that I have been maintaining this Weekly Index this is by far the longest lateral trend period it has witnessed. What does this mean? Well, by technical considerations, when the final break-out does come it should be a dozy. Generally, the longer the consolidation period (the in-the-box period) lasts the greater will be the move after. I go to my P&F charts to see just how high (or low) one might expect the move to go. Right now, should the price move straight out into a break-out on the Daily Index that move would project first to the 380 level followed by a second projection to 580. So, at the present time it’s a waiting game for the Daily Index to make a break-out. Should the lateral trend continue for much longer these projections could increase but even at the present state they suggest a very strong move ahead – should the Daily Index break on the up side. Heaven help us if it breaks on the down side, especially should it go below the original bottoming low of a year ago.
The Merv’s Daily Uranium Index closed lower on Friday by 0.76 points or 0.45%. There were 17 daily winners, 22 losers and 11 stocks toying with our emotions. Of the 5 largest stocks, all but one were lower. Cameco lost 1.2%, First Uranium lost 2.1%, Paladin lost 2.4%, Uranium One lost 0.3%, and Uranium Participation gained 0.2%. The best daily winner was Terra Ventures with a gain of 6.7% while the worst daily loser was Xemplar Energy with a loss of 5.4%. Market Vectors Nuclear Energy ETF lost 0.6%.
For the week the Merv’s Weekly Uranium Index gained 13.92 points or 0.26%. There were 20 weekly winners, 26 losers and 4 fooling around with our minds. The five largest stocks were mostly lower on the week. Cameco gained 3.1%, First Uranium lost 0.7%, Paladin lost 2.4%, Uranium One lost 1.8% and Uranium Participation lost 1.7%. The best weekly winner was Ucore Uranium with a weekly gain of 18.8% while the loser of the week was Bayswater Uranium with a loss of 14.1%. Market Vectors Nuclear Energy ETF gained 1.8%.
On the long term we are back to our slight difference of opinion between the Daily and Weekly Indices. The Weekly Index is once more below its long term moving average line and although the line has turned towards the down side for the past three weeks it has been in a basic lateral trend. The momentum indicator remains in its positive zone although very close to going below the neutral line. For now I would rate the Weekly Index as – NEUTRAL, one level above a full bear rating.
The Daily Index is more straight forward. It is below its negative sloping long term moving average line. The momentum indicator is in its negative zone below its negative trigger line. The momentum, as with the Index, has a support that has been there since the Index first went into its “box”. The momentum remains above this support line although the support is in the negative zone (see the longer term Daily Index chart posted earlier). The volume indicator took a plunge a month ago but is now tracking sideways. It remains below its long term negative sloping trigger line. On the long term the Daily Index can only be rated as BEARISH.
On the intermediate term the Daily Index remains well below its moving average line and the line slope remains in a downward direction. The momentum indicator is starting to perk up a little but is still in its negative zone. It has moved above its trigger line although the trigger line is still in a downward slope. The volume indicator is moving sideways but remains below its negative sloping trigger line. On the intermediate term the only rating I can give the Daily Index is a BEARISH rating. The short term moving average line is far below the intermediate term line confirming the bearish rating.
On the short term things are not much better despite the weeks somewhat upside activity. The daily Index remains below its short term moving average line, but not much below. The line itself remains in a negative slope. The momentum indicator is showing signs of life but is still inside its negative zone. It had moved above its oversold line after indicating a short term positive divergence with the price action. The indicator is also above its positive trigger line. As for the daily volume activity it remains pretty low even during the slight upward trend in the Index. For today the short term rating remains BEARISH but could change with another positive day’s activity. The very short term moving average line has not quite reached above the short term line for confirmation of this cautionary position.
As for the immediate direction of least resistance, I should go for the lateral but with a Stochastic Oscillator showing a sharp positive divergence with the price (similar to the short term momentum) and the Index having moved above the very short term positive sloping moving average the upside would be the best guess as to the immediate direction. We do have a short term up trending channel to go with that position.
As for the thought of getting back into stocks, well the gambler might just do it here and come out smelling like a rose. The more cautious speculator would wait for a slightly more positive speculative atmosphere before risking capital. It should be noted that in the Table of Technical Indicators and Ratings there is an overall percentage bullish/bearish rating for all stocks for the three time periods. The short term rating overall is still a bearish 78% with a bullish rating of 13%. These ratings should get a lot better on the bullish side before a cautious speculator starts to speculate with their capital.