Merv’s Weekly Uranium Review
for week ending 11 June 2010
Merv’s Daily Uranium Index
Market Data for Friday 11 Jun 2010
Open: 146.90
Hugh: 149.45
Low: 145.70
Close: 148.05
Volume: 4402
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.
I guess I misspoke too soon. Instead of saying we are in a turning process I guess I should have emphasized we are in a bottoming process. The same thing but turning has a more encouraging tone to it. I’d be inclined to give it another day and see if turning or bottoming is the more appropriate term.
Looking at the two long term Indices posted earlier one can see they are both drifting in sync except that one is into new lows for this move while the other is still above its lows of a few weeks back. The low priced stocks are getting hit the worst in this down draft, which is to be expected. They move faster on the up side also. Since Jan the low price\d stocks (Weekly Index) declined some 35% while the higher priced stocks (Daily Index) have declined only about 25%. Looking at it another way, the low priced stocks need to advance 50% in price from here to be where they were earlier in the year while the high priced stocks need only advance 33%.
The uranium stocks are getting hit hard and I am going to review the component stocks over the next week or so to see if the list needs to be revised. Always glad for suggestions (I’ll review them but can’t promise I will act on them).
The Merv’s Daily Uranium Index closed on Friday with an advance of 0.55 points or 0.37%. There were 19 winners, 18 losers and too many sleepers (13). Cameco gained 0.6%, Extract was a sleeper (it probably trades more often on the Aussie Exchange), Fronteer gained 1.4%, Paladin was another sleeper and Uranium One gained 2.3%. The best of the day was Energy Fuels with a gain of 9.7% while the worst of the day was Uranerz Energy with a loss of 9.2%. Market Vectors Nuclear Energy ETF gained 0.4%.
As for the week as a whole, the Merv’s Weekly Uranium Index lost 159.12 points or 3.65%. There were 14 weekly winners, 32 weekly losers and 4 weekly sleepers. Cameco lost 2.6% on the week, Extract lost 4.0%, Fronteer gained 14.4%, Paladin gained 3.3% and Uranium One lost 12.5%. The best gainer of the week was Fronteer with that 14.4% gain while the loser of the week was Terra Ventures with a loss of 25.8%. Market Vectors Nuclear Energy ETF gained 2.0%.
As mentioned above, the Weekly Index has moved into new reaction lows while the Daily Index is still a little above its low of a few weeks ago. Other than that nothing much has changed from the long term perspective. From the indicator and ratings perspective both Indices are acting together. Both are below their respective long term moving average lines and both lines are pointing downward. Both long term momentum indicators are in their negative zone and below their negative trigger lines. The volume indicator is slowly moving into new reaction low territory and remains below its negative trigger line. All in all the long term ratings for both Indices remains BEARISH.
On the intermediate term the Daily Index remains well below its negative sloping moving average line. The momentum indicator continues in its negative zone just below its negative trigger line. The volume indicator is no help and also continues below its negative sloping trigger line. Nothing yet encouraging to see here. The rating remains BEARISH. The short term moving average line is way below the intermediate term line confirming the bear and suggesting it will be a while before the rating turns around.
On the short term the Index has been toying with its short term moving average line. It was above the line for a few days but moved below the line and has been there all last week. The moving average line slope remains negative. The momentum indicator had given us a positive divergence warning a few weeks back and remains so this week. It is acting a little better than the Index action. However, the indicator remains in its negative zone but has crossed above its trigger line. The trigger itself has turned from the negative to the horizontal. The daily volume activity is pretty low and not really giving us any message worth while. On the short term the rating must remain BEARISH. The very short term moving average line has remained below the short term line for 2 months now (except for a few days the other week). It remains below the short term line confirming the bear.
As for the immediate direction of least resistance, I’m going to go out on a limb and go with the up side. The Stochastic Oscillator seems to be bouncing off its oversold line and heading upwards for a possible sign of things to come.
for week ending 11 June 2010
Merv’s Daily Uranium Index
Market Data for Friday 11 Jun 2010
Open: 146.90
Hugh: 149.45
Low: 145.70
Close: 148.05
Volume: 4402
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.
I guess I misspoke too soon. Instead of saying we are in a turning process I guess I should have emphasized we are in a bottoming process. The same thing but turning has a more encouraging tone to it. I’d be inclined to give it another day and see if turning or bottoming is the more appropriate term.
Looking at the two long term Indices posted earlier one can see they are both drifting in sync except that one is into new lows for this move while the other is still above its lows of a few weeks back. The low priced stocks are getting hit the worst in this down draft, which is to be expected. They move faster on the up side also. Since Jan the low price\d stocks (Weekly Index) declined some 35% while the higher priced stocks (Daily Index) have declined only about 25%. Looking at it another way, the low priced stocks need to advance 50% in price from here to be where they were earlier in the year while the high priced stocks need only advance 33%.
The uranium stocks are getting hit hard and I am going to review the component stocks over the next week or so to see if the list needs to be revised. Always glad for suggestions (I’ll review them but can’t promise I will act on them).
The Merv’s Daily Uranium Index closed on Friday with an advance of 0.55 points or 0.37%. There were 19 winners, 18 losers and too many sleepers (13). Cameco gained 0.6%, Extract was a sleeper (it probably trades more often on the Aussie Exchange), Fronteer gained 1.4%, Paladin was another sleeper and Uranium One gained 2.3%. The best of the day was Energy Fuels with a gain of 9.7% while the worst of the day was Uranerz Energy with a loss of 9.2%. Market Vectors Nuclear Energy ETF gained 0.4%.
As for the week as a whole, the Merv’s Weekly Uranium Index lost 159.12 points or 3.65%. There were 14 weekly winners, 32 weekly losers and 4 weekly sleepers. Cameco lost 2.6% on the week, Extract lost 4.0%, Fronteer gained 14.4%, Paladin gained 3.3% and Uranium One lost 12.5%. The best gainer of the week was Fronteer with that 14.4% gain while the loser of the week was Terra Ventures with a loss of 25.8%. Market Vectors Nuclear Energy ETF gained 2.0%.
As mentioned above, the Weekly Index has moved into new reaction lows while the Daily Index is still a little above its low of a few weeks ago. Other than that nothing much has changed from the long term perspective. From the indicator and ratings perspective both Indices are acting together. Both are below their respective long term moving average lines and both lines are pointing downward. Both long term momentum indicators are in their negative zone and below their negative trigger lines. The volume indicator is slowly moving into new reaction low territory and remains below its negative trigger line. All in all the long term ratings for both Indices remains BEARISH.
On the intermediate term the Daily Index remains well below its negative sloping moving average line. The momentum indicator continues in its negative zone just below its negative trigger line. The volume indicator is no help and also continues below its negative sloping trigger line. Nothing yet encouraging to see here. The rating remains BEARISH. The short term moving average line is way below the intermediate term line confirming the bear and suggesting it will be a while before the rating turns around.
On the short term the Index has been toying with its short term moving average line. It was above the line for a few days but moved below the line and has been there all last week. The moving average line slope remains negative. The momentum indicator had given us a positive divergence warning a few weeks back and remains so this week. It is acting a little better than the Index action. However, the indicator remains in its negative zone but has crossed above its trigger line. The trigger itself has turned from the negative to the horizontal. The daily volume activity is pretty low and not really giving us any message worth while. On the short term the rating must remain BEARISH. The very short term moving average line has remained below the short term line for 2 months now (except for a few days the other week). It remains below the short term line confirming the bear.
As for the immediate direction of least resistance, I’m going to go out on a limb and go with the up side. The Stochastic Oscillator seems to be bouncing off its oversold line and heading upwards for a possible sign of things to come.
3 comments:
Merv, what concerns me is the break of the ~155 price zone on the daily index. Price has come back up to test that level from below and for now appears to have failed.
This is a classic technical failure pattern that can be observed in markets across all timeframes.
Now this does not mean that price will not rocket higher from here. Anything can happen. But I am very discouraged by the failure of this support level that has been significant for the past 18 months. And just time for the old saying... Sell In May And Go Away.
If lower prices are truly in store then we can only console ourselves that we'll have some great buying opportunities for this promising, under the radar sector.
Hi Merv,
can't see the other charts this time.
Maxxu
Anonymous
The support you mention could be seen as anywhere from 150 to 155 but in either case it was broken. Usually, after a support break one would expect a significant decline or a short rally followed by a more serious decline. We have had a short rally but as yet no serious follow-on decline. I would wait for it to happen. Note that the further back in time you go to draw your support line the weaker that support becomes. This support shows up strong on a P&F chart which does not reflect time, but shows up weak on a bar chart.
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