Merv’s Weekly Uranium Review
for week ending 26 March 2010
Merv’s Daily Uranium Index
Market Data for Friday 26 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.
The week in uranium stocks ended slight lower than last week but overall it was a snoozer of a week. We continue in the short term box and in the long term box. Just boxed in as it were. If we cut off the Jan peak and the July valley in the Weekly chart we get a similar box in the Weekly Index as we have in the Daily Index. We are presently just about in the middle of those long term boxes. I have included a shorter term view of the long term Weekly Index for reference. It is easier to see where we are here than in the chart posted earlier.
On Friday the Merv’s Daily Uranium Index closed higher by a whole 0.24 points or 0.14%. There were 18 winners, 26 losers and 6 stocks bumming around. Cameco gained 0.4%, First Uranium lost 1.5%, Paladin lost 1.9%, Uranium One gained 0.4% and Uranium Participation lost 0.3%. The best daily winner was Purepoint Uranium with a gain of 15.0% while the worst daily loser was Bayswater Uranium with a loss of 6.9%. Market Vectors Nuclear Energy ETF gained 0.2%.
For the week as a whole the Merv’s Weekly Uranium Index closed lower by 84.91 points or 1.57%. There were 19 weekly winners, 30 weekly losers and one stock just bumming the week around. Cameco lost 2.4% on the week, First Uranium lost 19.5%, Paladin lost 3.2%, Uranium One lost 1.1% and Uranium Participation gained 0.7%. The best weekly winner was Quest Uranium with a weekly gain of 10.0% while the worst weekly loser was First Uranium with that 19.5% loss. Market Vectors Nuclear Energy ETF lost 21.6% on the week.
Well, for the first time in a couple of months both the Daily and Weekly Indices are in sync, both on the negative side. The Weekly long term momentum indicator has now dropped into its negative zone (although just barely) keeping the Daily Index momentum company. What is unsettling is that although the Weekly Index momentum is showing slightly greater strength than the Daily Index it is showing greater weakness relative to its own strength over the past many months. It is at its lowest value since its low of July 10th. Unless things change pretty darn soon we might be in for another rough period ahead. I know many of you are reading all sorts of news that should be good for uranium stocks but the stock price action is saying something different, so far.
Both long term Indices (Daily and Weekly versions) are below their respective negative sloping moving average lines. Both momentum indicators are in their negative zones and below their respective negative trigger lines. The Daily Index volume indicator continues to move sideways but with a slight negative bias. It is below its negative trigger line. For the first time in months, both the Daily and Weekly Indices have the same long term rating, BEARISH.
On the intermediate term everything is negative. The Daily Index remains below its negative sloping moving average line. The momentum indicator is moving ever lower inside its negative zone below its negative trigger line. The volume indicator, although basically in a lateral trend, is below its negative trigger line. The intermediate term rating remains BEARISH. The short term moving average line remains below the intermediate term line for confirmation of the bear.
On the short term, what can I say? The Daily Index remains below its negative sloping moving average line. The momentum indicator is moving ever lower inside its negative zone below its negative trigger line. The daily volume activity is low and not providing any news we can use. The short term rating remains BEARISH. The very short term moving average had moved below the short term average a few days back and confirms the short term bear.
As for the immediate direction of least resistance, well let’s see where things are. The daily Index is below its very short term negative sloping moving average line and the Stochastic Oscillator is in its negative zone below its negative trigger line. However, the SO has not yet made a low below its Monday low as the Index has made. This may be seen as a very short term positive but may or may not last. One last thing to consider. I have not drawn it but you can draw an up trend support line on the SO from the Jan 25 low and through all the lows up until Thursday of the previous week. This break below such a long support trend line on the SO is something to seriously consider. I think that there is still some more down side to come. How serious of a down side is something else. I would not be at all surprised if the Index continues lower to test the Feb low. I hope I’m wrong but if I’m right there should be more excellent stocks bottoming at ever lower prices.