for week ending 12 March 2010
Merv’s Daily Uranium Index
Market Data for Friday 12 Mar 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.
Friday was an up day but the trading has not yet moved out of that short term box. The action is starting to look good but we need a few more days of reasonable upside action before we can get too encouraged.
The two long term charts posted earlier showed the uranium stock action for effectively the same period. I thought I’d show the two Indices for the same period to highlight the different market action one can expect from the “quality” or higher priced stocks versus the speculative or lower priced stocks. The Daily Index represents the higher priced stocks while the Weekly Index represents the lower priced ones. It should be emphasized that BOTH Indices have the exact same component stocks.
While the Daily Index gained 100% during its initial rally from the 2008 low the Weekly Index gained 200% during the same period. It looked like we were into a new move in Jan but the Daily did not break into new highs while the Weekly did. In Feb the Daily was back to almost its lateral period lows while the Weekly stayed well above its several month low levels. Now, the Daily is in the middle of its trading range while the Weekly is near the top of its range. For performance, it looks like the lower priced stocks have it all over the higher priced ones. As for risk, well if you pay attention to the charts and have well placed stop loss points to protect from surprises, the risk is not much more with the lower priced stocks.
I did a quick look-see at those five largest stocks by market value. As a group they bottomed out a month before the Indices bottomed. They rallied into the May/June time period with a 100% gain same as the Daily Index. They made a reaction low in July but unlike the Daily Index they made a lower low in early Oct. The quick rally into late Oct carried the Daily Index back to its previous highs while the top 5 stayed below its high by several %. While the Daily rallied into the new year back to its highs the top 5 reached their high in late Dec some 6% below their previous May/June high. The subsequent decline took the top 5 to new lows, yes, into new lows last week 5% below its previous lows from last Oct. The top 5 are not performing very well. This is also not adequately reflected in either Index. From this I would caution “investors” from investing in the top quality or largest stocks in this group as they do not seem to be performing while the lower priced stocks are at least holding well above their July and Oct lows.
So, why did I bring all this out and spend a good page worth of commentary? Hell, it’s a good space filler. With the frustrating non-action we have been having lately it was getting hard to find something to talk about from the market action standpoint. On the week-ends I try to expand my commentary but as I said, it was getting hard to find something to talk about so ------.
The Merv’s Daily Uranium Index closed on Friday up 1.54 points or 0.89%. There were 23 winners, 17 losers and 10 stocks not in the game. Cameco gained 0.3%, First Uranium gained 12.8%, Paladin gained 1.5%, Uranium One gained 0.7% and Uranium Participation lost 1.5%. The best daily winner was Mawson with a gain of 24.3% while the worst daily loser was Formation Capital with a loss of 6.4%. Market Vectors Nuclear Energy ETF gained 1.0%.
As for the week as a whole, the Merv’s Weekly Uranium Index closed lower by 68.90 points or 1.21%. The Daily Index was up on the week by 1.01%. Those top 5 were up by 1.8%, hey maybe they are starting to change their mode of operation and are thinking of showing some performance, do you think? There were 16 weekly winners, 31 weekly losers and 3 stocks not in the game. Cameco gained 2.6% on the week, First Uranium gained 11.3%, Paladin gained 3.6%, Uranium One lost 3.8% and Uranium Participation lost 2.2%. Something doesn’t add up here. If I average the weekly gains for those top 5 I get a weekly average of 2.3%, not 1.8 as my quick survey shows. I’ll check it out later but the trend is okay just the numbers seem not to match. I must work for the IPCC or someone like that. Where was I? Oh yeh, The best winner of the week was Mawson with a weekly gain of 38.1% while the worst performer was Uranerz Uranium with a loss of 11.7%. Market Vectors Nuclear Energy ETF gained 0.9% on the week.
On the long term we remain with the situation we have had for some time now, the different prognosis between the Daily and Weekly Indices. The Weekly Index remains above its positive sloping moving average line. The momentum indicator remains in its positive zone and the long term rating remains BULLISH.
The Daily Index, however, is still below its negative sloping long term moving average line. Its momentum indicator remains in the negative zone. Both are looking like they want to change all that but not yet this week. The long term rating for the Daily Index remains BEARISH.
On the intermediate term the Daily Index closed just a ting above its moving average line although the line slope is still towards the down side. The momentum indicator is still in its negative zone but above its positive sloping trigger line. The Indicator is very, very close to the neutral line and it might go into the positive zone on another day of positive action. The volume indicator is still in more of a lateral trend but has just moved above its trigger line. The trigger is still pointing downward at this time. Putting it all together the intermediate term can be rated as + NEUTRAL, just one notch from a full bull.
Things are a lot better looking from the short term perspective. The Daily Index has closed above its short term moving average line and the line is sloping upwards. The momentum indicator is in its positive zone above a positive trigger line. The indicator is acting better than the Index and is at its highest level since mid-Jan. The daily volume action may just be perking up. On Friday it was above its 15 day average volume, and that was `an up Index day. Maybe speculative interest is starting to slowly get back into the stocks. The short term rating is BULLISH. The very short term moving average has moved above the short term average for confirmation of this short term bullish rating.
As for the immediate direction of least resistance, I think it’s time to get out of the lateral and into the up side. The Index is above its very short term moving average line and the line has turned upwards. The Stochastic Oscillator is moving higher above its positive trigger line and has entered its positive zone. I have a feeling that that resistance at the 177 level will be breached this week. Upside, go man go (sorry ladies, I don’t pretend to be politically correct but it’s a generic term here, you know, like manhole cover, and the like and besides, go person go just doesn’t do it).