for week ending 06 August 2010
Merv’s Daily Uranium Index
Market Data for Friday 06 Aug 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.
Back home again and back on track with the commentary (I hope).
Gone two weeks and the Merv’s Daily Uranium Index has been on the march, but oh so cautiously. The advance does not seem to have the numbers of speculators behind it that would cause one to jump with joy and declare a new roaring bull market. Yes, it is moving higher but for how long? Let’s do our regular indicator crunching.
The Merv’s Daily Uranium Index closed on the up side on Friday but who would have notices? It was ahead 0.23 points or 0.14%, hardly anything to write home about. There were 24 daily winners, 16 losers and 10 not joining the moves. Cameco gained 0.7%, Extract was not joining the move, Fronteer gained 2.4%, Paladin lost 0.5% and Uranium One lost 0.7%. The best mover of the day was Benton with a gain of 17.9% while the worst loser was Forsys Metals with a loss of 5.5%. Market Vectors Nuclear Energy ETF lost 0.8%.
For the week as a whole (Monday was a Canadian holiday so there were only 4 trading days) the Merv’s Weekly Uranium Index closed higher by 137.28 points or 2.92%. The only real winning day was Tuesday, other than that the stocks just moved sideways. There were 29 weekly winners, 15 losers and 6 not joining in the moves. Cameco gained 3.7% on the week, Extract lost 8.3%, Fronteer gained 9.7%, Paladin gained 4.5% and Uranium One gained 1.8%. The best winner of the week was Benton with a gain of 28.6% while the loser of the week was Pele Mountain with a loss of 12.0%. Market Vectors Nuclear Energy ETF gained 2.0%.
Looking at the long term charts and indicators we are still just a little bit shy of turning the corner. Both the Daily and Weekly Indices are just a hair below their negative sloping moving average lines. The momentum indicators for both are just below their neutral lines in the negative zones. They are, however, moving upwards and are above their respective positive trigger lines. As for the Daily Index long term volume indicator, it moved above its trigger line the previous week and remains there. The trigger has now just turned to the up side. However, although the Index moved into new recovery highs this past week the volume indicator did not. This is a continuation of the troubling low volume action. Today, the long term rating must remain BEARISH but that may change with a couple of good upside moves.
The intermediate term is more pleasing to review. The Daily Index remains above its positive sloping moving average line and the momentum indicator is moving aggressively higher inside its positive zone and above its positive trigger line (where it’s been for a month now). As for the volume indicator, it remains above its positive sloping trigger line but is not moving higher enthusiastically. The intermediate term remains rated as BULLISH with no immediate danger of reversing. The short term moving average line is confirming this rating by moving above the intermediate term moving average line.
As for the short term everything still looks rosy but there are some undercurrents that may dampen the spirits. The Daily Index remains above its positive moving average line while the momentum indicator remains in its positive zone above its positive trigger line. The daily volume action is pathetic and really, really needs to pick up on the up side or the longevity of this bull phase will be short lived. The daily action these past few days has been butting up against the long term moving average line and seems stuck there. The momentum indicator is in its positive zone but so high in the zone that it had entered its overbought level. It had reacted lower and once more is moving upward BUT it looks with lower momentum than before. We just might be getting a short term negative divergence signaling a reversal of short term trend. For now the indicators are giving us a BULLISH rating for the short term with the very short term moving average confirming the rating.
As for the immediate direction of least resistance, the Index may still move in a basic sideways direction for another day or two but the strength seems to be towards some sort of downside reaction. I will go with the lateral direction for the next day.