for week ending 09 March 2010
Merv’s Daily Uranium Index
Market Data for Friday 09 Apr 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 ended confused as far as the Daily Index was concerned. As mentioned below, the Daily Index closed up by 0.55% but if we should calculate it using the Weekly Index method we get a down day by 0.49%. Oh well, these things are there to confuse us. There is an old saying that the market does what it has to do to confuse most investors most of the time.
In another week or two we will be in this lateral trend for a full year. One way of looking at it is that the longer it stays in a lateral trend it is continually building up strength for its next move. After a year of sideways travel one might expect the trip on the up side to be really exciting. We’ll see.
Other than the continuing lateral trend there is nothing in the charts of any pattern to grab on to so I’ll get right into the indicators.
Friday, the Merv’s Daily Uranium Index closed higher by 0.98 points or 0.55%. There were 17 winners, 24 losers and 9 spoilers. The new 5 largest stocks by market value were mixed. Cameco gained 2.0%, Extract lost 0.4%, Paladin gained 2.5%, Uranium One lost 0.4% and USEC gained 1.7%. The best winner of the day was Benton Resources with a gain of 8.3% while the loser of the day was Pele Mountain with a loss of 8.1%. Market Vectors Nuclear Energy ETF gained 0.9%.
For the week as a whole the Merv’s Weekly Uranium Index closed the week with a gain of 61.57 points or 1.12% (the Daily closed the full week with a gain of 2.29%). It looks like the week went to the higher priced stocks rather than the low priced ones. Cameco gained 2.7% on the week, Extract lost 0.3%, Paladin gained 3.6%, Uranium One gained 2.5% and USEC gained 5.1%. The best weekly winner was Quest Uranium with a gain of 24.1% while the loser of the week was Fission Energy with a loss of 11.4%. Market Vectors Nuclear Energy ETF gained 0.8%.
There was a question about Quest Uranium getting out of the uranium business. My contact with the company suggests they still hold their uranium property although there is still a question about how active their activities in this area are. I will retain Quest in the Index for a while yet but will try to assess their activities further. As the front page of this blog mentions, most companies have other activities besides uranium but must have uranium activity to be considered.
The weekly Index long term indicators bare once more looking up. The Index has just moved above its long term moving average line and the line is pointing upwards. The momentum indicator continues in its positive zone and is above its trigger line, although the weekly trigger is still sloping downward. In any case the Weekly Index long term rating is BULLISH.
Looking at the Daily Index long term indicators, things are still confused. The Index is above its positive sloping moving average line. The momentum indicator is still below its neutral line in the negative zone but only very slightly so. It is, however, above its positive trigger line. The volume indicator is in a basic lateral move but has just closed above its trigger line. The trigger, however, is still sloping downward. The Daily Index long term rating is now BULLISH.
On the intermediate term everything is on the plus side. The Daily Index is above its positive moving average line. The momentum indicator is in its positive zone above its positive sloping trigger line. The volume indicator is above its positive sloping trigger line. The intermediate term rating is therefore fully BULLISH. The short term moving average line is above the intermediate term line for confirmation.
On the short term things are likewise clear cut. The Daily Index remains above its positive moving average line. The momentum remains in its positive zone above its positive trigger line. Only the daily volume action is not all that great but this may be still an after effect from the Easter holidays. Let’s see what next week brings. On the short term the rating remains BULLISH. The very short term moving average line is above the short term line for confirmation.
As for the immediate direction of least resistance, the aggressive Stochastic Oscillator has been showing weakness over the past few days and has crossed below its trigger line to the down side. The actions of the Index itself are still not all that bad but the SO may be telling us something. I’ll go with the lateral direction for another day or so and see what transpires.
There are going to be some great gains made in uranium stocks in the future but don’t count on it ahead of the actual moves. Too many surprises can happen. Go with the flow on the up side or just relax and have a beer if we should get into a down side. If you are using the info from the weekly table make sure the intermediate term rating is POS for whatever stock you are speculating in. Remember also, trends are usually seen first in the short term so never buy a stock if the short term is against you. There are some exceptions to this “rule” but only during a well defined up trend in the stock.