for week ending 02 July 2010
Merv’s Daily Uranium Index
Market Data for Friday 02 Jul 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.
So, we broke into new lows below the previous support through which the Daily Index was not suppose to break below. Now what? Things are not as bleak as they may seem (unless you are still holding on to stocks for dear life). Looking on the bright side the short and intermediate term momentum indicators are holding their own and may be giving us a positive divergence message. Only time will tell. The long term momentum is, however, into new lows with the Index. The volume indicator is, however, into new lows confirming the Index move. We will just have to wait it out and see what the future brings. The more the stocks drop the better the bargains will be in the end.
The Merv’s Daily Uranium Index dropped into new reaction lows with a decline of 1.41 points or 0.99% on Friday (Thursday was Canada’s birthday and the Canadian Exchanges, where most of the Index stocks trade, were closed). There were 11 winners, 29 losers and 10 going nowhere. Cameco lost 1.3% on Friday, Extract gained 5.4%, Fronteer lost 1.1%, Paladin lost 2.2% and Uranium One gained 5.0%. The best daily winner was JNR Resources with a gain of 7.1% while the loser of the day was Quest Uranium with a loss of 14.5%. Market Vectors Nuclear Energy ETF lost 0.2%.
For the full week the Merv’s Weekly Uranium Index lost 178.69 points or 4.36%. There were only 8 weekly winners, 38 losers and 4 going nowhere. Cameco lost 4.9% on the week, Extract lost 5.6%, Fronteer lost 2.6%, Paladin lost 9.4% and Uranium One gained 5.0%. The best weekly winner was Ucore Uranium with a weekly gain of 19.0% while the loser of the week was Tournigan Energy with a loss of 25.0%. Market Vectors Nuclear Energy ETF lost 5.6% on the week.
The long term and intermediate term indicators are in an identical phase so I’ll just combine their review into one. Both the Weekly and Daily Indices are below their negative sloping long term moving average lines as is the intermediate term Daily Index below its negative moving average line. The long term momentum indicators for the Weekly and Daily Indices as well as the intermediate term momentum indicator are all in their negative zones below their negative trigger lines. The volume indicator is moving into new reaction lows and is below its negative sloping long and intermediate term trigger lines. What can I say, the ratings for the Weekly and Daily long term as well as the Daily intermediate term are all BEARISH. The short term moving average line remains some distance below the intermediate term line confirming the bear and suggesting that a reversal of trend is not only a few days away.
As for the short term the Daily Index remains well below its negative sloping moving average line. The momentum indicator remains in its negative zone below its negative trigger line. It is, however, entering its oversold zone so maybe there is a reversal of trend not too far ahead. The momentum indicator is giving us a clear positive divergence message, at least at this time. For this message to be validated we need a reversal in the Index before the momentum falls much further. The daily volume activity remains pretty low and not helping. The short term rating remains BEARISH with the very short term moving average line confirming this rating.
As for the immediate direction of least resistance, the Stochastic Oscillator is in its oversold zone and appears to be rounding out back towards the up side. A bounce or rally (not yet a reversal) may be expected momentarily. As for immediate, I’ll go with the lateral again.