for week ending 16 April 2010
Merv’s Daily Uranium Index
Market Data for Friday 16 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.
Another day is over and another week is finished and both were on the down side as far as the Uranium Indices were concerned. The price of uranium itself was no help this past week although it only declined by $0.25. Uranium remains above its lows and support but not by very much. The support is at the $40 level while the most recent price of uranium is around $41.50. The most disconcerting indicator is the daily volume activity. This is where we should see the speculators come back to the fold and start increased activities but so far the daily volume activity for some time has been unimpressive, not like the increased activity a year ago.
I started my Weekly Uranium Index on Jan of 2003 at a value of 100. It rose over the next few years to reach 14513 in April of 2007, an increase of 14,400%. We are still at less than half that value but maybe the consolidation of the huge profits that were made during the advance has not ended. It takes some time for the events on the ground to catch up to such large advances in stock prices, in such a relatively short space of time. I just hope we do not have to wait another year before a new long term move takes hold.
The Merv’s Daily Uranium Index closed on Friday with a decline of 3.21 points or 1.82%. There were 15 daily winners, 29 daily losers and 6 that still had no idea which way to go. Cameco lost 1.1%, Extract lost 7.5%, Paladin lost 3.1%, Uranium One gained 1.9% and USEC lost 3.8%. The best daily performer was Pele Mountain with a gain of 6.3% while the worst daily performer was Ucore Uranium with a loss of 9.6%. Market Vectors Nuclear Energy ETF lost 2.0%.
As for the week as a whole, the Merv’s Weekly Uranium Index closed with a loss of 168.54 points on the week, or 3.03%. There were 14 weekly winners, 31 losers and 5 with no idea which way to go. Cameco lost 4.3% on the week, Extract gained 1.0%, Paladin lost 6.2%, Uranium One lost 1.1% and USEC lost 4.5%. The best weekly winner was Ucore with a gain of 21.0% on the week while the loser was Khan with a weekly loss of 42.5%. Market Vectors Nuclear Energy ETF lost 3.2% during the week.
Although there is a slight difference in the indicators using the Daily or Weekly Indices for the long term ratings, the ratings end up to be the same using either Index. Using the Daily Uranium Index for our long term rating we see that the Index is below its negative sloping moving average line. The momentum indicator remains in its negative zone below its negative trigger line (this is the one difference with the Weekly Index in that the Weekly Index momentum indicator is still very, very slightly above its neutral line in the positive zone). The volume indicator has moved below its negative trigger line. The rating, applied to both the Daily and the Weekly Indices, is BEARISH.
As for the intermediate term, changes are taking place here. The Daily Index has now closed below its moving average line and the line has (barely) turned downward. The momentum indicator has also moved below its neutral line and is below its negative trigger line. The volume indicator continues on its lateral trend and is just above its negative trending trigger line. On the intermediate term the rating is BEARISH.
On the short term everything has also gone negative. The Index is below its negative moving average line, the momentum has entered its negative zone and is below its negative trigger line and the daily volume is no great shakes. The short term rating is BEARISH.
As for the immediate direction of least resistance, that is about the only good news, or what is starting to look like good news. The direction seems to be continuing in the downward direction but on Friday it also seems like it has met some resistance to further downside. Although the Index took a plunge earlier in the day it looks like it ended the day in a rally mode. The aggressive Stochastic Oscillator seems also top have hit a level of resistance. For the past few days it has not moved lower despite the lower Index moves. Here too it looks like the SO is ready to move above its trigger line. I will maintain my lateral direction guess for another day but would not be surprised if we should see some upside action ahead.