for week ending 23 July 2010
Merv’s Daily Uranium Index
Market Data for Friday 23 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.
Well, that wasn’t such a bad week after all. The Daily Index was ahead 3.21% for the week while the Weekly Index was ahead by 7.94%. It was the low priced stocks that were moving, more so than the higher priced ones. That old market saying that the speculative stocks do not move unless the speculators (those who can move prices) are more positive on the market (or group) as a whole seems to apply here. Why speculate on the dogs if you are not comfortable with the market. You could get slaughtered fast if the market is not with you. And this improvement in the stocks is happening without the benefit of roaring uranium prices. In gold the idea is that the stocks move ahead of a movement in the metal. Maybe that is what we have here. Let’s hope that a new trend is on its way although as we will see in the analysis there is still some more work to do for the longer term. One or two good weeks do not make a new long term trend, but it is always a start.
The Merv’s Daily Uranium Index closed higher by 1.38 points or 0.92% on Friday. There were 29 winners, 14 losers and 7 just hanging around. Cameco lost 0.1% on Friday. Extract was just hanging around. Fronteer gained 0.6%, Paladin gained 3.3% and Uranium One lost 0.4%. The best daily winner was Ucore Rare Metals with a gain of 21.6% while the loser of the day was Uranium Resources with a loss of 6.4%. Market Vectors Nuclear Energy ETF gained 1.3%.
For the week as a whole the Merv’s Weekly Uranium Index closed higher by 316.96 points or 7.94%. There were 36 weekly winners, 10 losers and 4 just hanging around. Cameco ended the week with a gain of 0.8%. Extract lost 6.2%, Fronteer lost 2.8%, Paladin gained 5.5% and Uranium One lost 1.1%. The best weekly winner was Khan Resources with a gain of 52.2% having lost a little of it 89% Monday gain. The worst weekly loser was First Uranium with a loss of 17.6%. Market Vectors Nuclear Energy ETF gained 3.5% on the week.
Despite the good performance this past week nothing of significance has happened as far as the long term indicators are concerned. Yes, they are starting to firm up and even start moving towards positive readings but they still have a ways to go before the ratings change. Both the Daily and Weekly Indices remain below their long term negative moving average lines. Both long term momentum indicators are still well in their negative zones although both are moving upwards and have crossed above their positive trigger lines for the first somewhat positive indication in the long term camp. The volume indicator remains in a basic lateral drift that it has been in for a few months and remains below its negative trigger line. The indicator is, however, very close to the trigger and with a few days of upside action could move above the trigger. For now both the Daily and Weekly Indices are rated as BEARISH on the long term.
Going a little more aggressive we get to the intermediate term where things are changing but not yet drastically. The Daily Index closed above that down trend line which could be considered as either a short or intermediate term line. The Index has also closed above its intermediate term moving average line, however, the line remains slightly negative in slope. The momentum indicator continues to move upwards heading towards its neutral line but still in the negative zone. It is now comfortably above its level from the past three months of trading and is above its positive trigger line. The volume indicator still has a little to go before breaking into new recent highs but is now above its now positive sloping trigger line. The intermediate term rating can only go as high as + NEUTRAL, one level below a full bull. The short term moving average line remains below the intermediate term line for not yet confirmation of a bull but is heading in that direction fast.
The short term is all gung-ho positive. The Daily Index not only closed above the down trend line but also above its previous short term high. It remains above its positive sloping moving average line. The short term momentum indicator is not only in its positive zone but above its level for the past 3 months. It is almost at its level from the early April high. Only the daily volume action leaves a lot to be desired. We need the speculators to come up to the plate and speculate in volume or else the move may collapse from lack of support. I’m not yet sure how to read this volume activity. Prices move when the speculators who can move prices are in the market but the volume activity suggests that there are not many of them yet participating. Time will tell what’s going on. In the mean time the short term rating can only be BULLISH. The very short term moving average line remains above the short term line for continuing confirmation of the bull.
As for the immediate direction of least resistance, well the Stochastic Oscillator suggests that there is still room for more upside action. Everything is heading in that direction so who am I to go against the flow. I’ll go with the up side for another day.