Uranium Companies

There are very few pure uranium companies. Most companies, especially the small exploration type, are active in more than the uranium industry. This blog makes no attempt to guage the percentage of a companies activity that are related to the finding, mining or processing of uraniun. They all do, however, have some uranium activities (to the best of our review).

Merv's Uranium Indices

I have developed two Uranium Indices. They each have the same component stocks but are calculated using different methodologies. My weekly Index is based upon the average weekly performance of the component stocks. My daily Index is based upon the daily average of the component stocks open, high, low and close prices along with the daily average volume of all component stocks.

Click on the chart or table to enlage the view.

15 August 2010

Merv's Weekly Commentary 15 Aug 2010

Merv’s Weekly Uranium Review
for week ending 13 August 2010

Merv’s Daily Uranium Index
Market Data for Friday 13 Aug 2010

Open: 156.35
Hugh: 158.64
Low: 153.94
Close: 155.44
Volume: 2447

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 close and yet so far away. Both Indices were approaching their long term moving average lines and about to go above the lines but unfortunately, reacted to the lines and dropped. How far this drop will go is a good question. I personally do not think it will go far BUT that is not a technical opinion, just a personal one. Technically, it can go anywhere and as a technician I must follow it. There is nothing technically special on the charts from a pattern/trend standpoint. About the only chart event that one can see is that the Indices are at their previous support/resistance level from activity last July/Aug. Whether they are at a support or resistance depends upon if they are above or below whatever line we draw. The support/resistance is more of a range now than a specific line.

The Friday’s action was a little bit of a bummer with the Merv’s Daily Uranium Index closing lower by 0.79 points or 0.51%. There were 15 daily winners, 23 losers and 12 bumming around. Cameco lost 0.6%, Extract was a bumming around stock, Fronteer lost 3.1%, Paladin gained 1.1% and uranium one gained 0.3%. The best winner on Friday was Pele Mountain with a gain of 15.8% while the loser’s price went to Wealth Minerals with a loss of 9.6%. Market Vectors Nuclear Energy ETF lost 0.1%.

For the week as a whole the Merv’s Weekly Uranium Index closed the week lower by 196.61 points or 4.06%. There were 8 weekly winners, 36 weekly losers and 6 stocks bumming around the whole week. Cameco lost 4.8% on the week, Extract gained 9.2%, Fronteer lost 3.8%, Paladin lost 2.9% and Uranium One gained 10.9%. That gain for Uranium One placed it as the weekly winner while a 19.4% loss for Blue Sky Uranium placing it as the loser of the week. Market Vectors Nuclear Energy ETF lost 4.5% on the week. Yes, even these large ETFs can lose you money.

On the long term it was so close. It looked very encouraging for a day or two but speculators thought differently. Both the Daily and Weekly Indices just touched their long term moving average lines and reacted. The lines themselves have been in the process of turning towards the up side. What this reaction means is that the next time these Indices move through their respective moving average lines the lines will be just about at the turn around level to confirm such move by the Indices. The same can be said for both long term momentum indicators. Both indicators just about breached their neutral lines before reacting. Next time when the Indices breach their moving average line the momentum indicators should be right their confirming the breach, if not ahead of the breach. For now the long term rating must remain BEARISH.

On the intermediate term things are a little less positive. The Daily Index remains above its positive moving average line while the momentum indicator is moving lower below its negative trigger line. Worse yet the momentum indicator moved into its negative zone a couple of days back and remains there. The volume indicator has just breached (to the down side) its trigger line by a very tiny amount. The trigger is still, however, in a positive trend. The intermediate term rating can only be best rated at + NEUTRAL for now. The short term moving average line remains above the intermediate term line confirming things have not yet turned fully negative.

As we go to the short term we get even more negative. The Daily Index is trading below its moving average line while the line slope is heading downward. The momentum indicator, however, is still slightly in its positive zone although heading lower rapidly. The indicator is below its negative trigger line. The daily volume action remains low and not giving us any help. On the short term the rating remains BEARISH. The very short term moving average line has just moved below the short term line to confirm the bear.

This is a frustrating time for speculators who want to jump into a bullish uranium stock market but the indicators are not yet fully there. We see many individual stocks making great gains but gambling on the few is just that, gambling. That’s okay for those who understand they are gambling at this time and have their exit strategies active just in case things turn around on them. My guess is that very few who ARE in the market at this point really have effective exit strategies and are counting that their guesses are going to prove out to be correct. Remember all the speculators a couple of years back who were thinking the same. Many are still 80% or so in the whole and that would require a move of 400% or more just to recover back to break even.

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