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.

06 September 2010

Merv's Weekly Commentary 06 Sept 2010

Merv’s Weekly Uranium Review
for week ending 03 September 2010

Merv’s Daily Uranium Index
Market Data for Friday 03 Sep 2010

Open: 163.11
Hugh: 164.89
Low: 161.12
Close: 163.31
Volume: 3168

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.

Except for Monday the week was basically on the up side, nothing spectacular but still on the up side. We are now at a crucial point. Friday’s close was a new recovery high on the Daily Index but not yet on the Weekly Index. In any case we are still trapped inside that “box” pattern although the Daily and Weekly Indices are butting up against the upper resistance line. It’s now a question of where to from here?

These commentaries try to do two things. I try to determine where we are at the present time and try to guess, an educated guess, as to where is the most likely place we are headed. The first is based upon a review of the various technical indicators and the second is based upon the on-going trend along with known support or resistance levels and possibly other patterns and techniques. Anyone who expects these commentaries to be perfect is dreaming, anyone who expects ANY commentary and/or analysis by any expert or guru to be perfect is dreaming in Technicolor. I’ve been around the markets for almost 50 years and have yet to find that perfect market guru. For this reason it is imperative for all investors, speculators and gamblers to have some understanding of the markets and try to determine their own assessment of the markets and not reply solely upon some commentator or market guru. Through these commentaries and especially via my weekly precious metal commentaries found in the web site or in numerous other sites I try to instill an understanding of the technical discipline hoping some if it eventually sticks. You can always err using the technical discipline but you will very, very rarely err causing a catastrophic loss of capital. The odds are that many readers are holding stocks in which they have huge losses. I am sure that if you look back at a chart of your stocks most will easily see where they went wrong in not getting out with limited loss. It’s not rocket science, it’s market discipline.

The Merv’s Daily Uranium Index closed on the Friday trading ahead by 0.91 points or 0.56%. There were 20 winners, 21 losers and 9 stocks just fooling around. Cameco gained 0.3%, Extract was fooling around, Fronteer lost 0.5%, Paladin lost 0.3% and Uranium One lost 1.1%. The best daily winner was Pele Mountain with a gain of 15.0% while the worst daily loser was Wealth Minerals with a loss of 14.3%. Market Vectors Nuclear Energy ETF gained 1.4% on Friday.

For the week as a whole the Merv’s Weekly Uranium Index closed higher by 170.69 points or 3.67%. There were 31 weekly winners, 12 losers and 7 just fooling around. Cameco gained 3.8% on the week, Extract gained 5.2%, Fronteer lost 7.0%, Paladin gained 5.1% and Uranium One gained 1.7%. The best weekly winner was Benton with a weekly gain of 21.4% while the worst loser of the week was NWT Uranium with a weekly loss of 7.5%. Market Vectors Nuclear Energy ETF gained 3.3% this past week.

I include the performance of the Market Vectors Nuclear Energy ETF every day not because I think it is a good fund to own but only because it is one of the more actively traded funds and easier to keep daily track off. I know there are investors who are uncomfortable with individual stocks and prefer a fund because of its variety of share ownership. The Market Vectors is a reasonable example of a fund which invests in a wide variety of stocks within the general nuclear industry. Any investor should check into the fund details and get a professional’s assessment of the fund before actually putting any capital into it. It may or may not be to your final liking.

Things are finally starting to look up as far as the long term indicators are concerned. Both the Weekly and Daily Indices have closed above their long term moving average lines although in both cases the lines are still pointing downward. I expect this will change within the next few days unless the Daily Index drops suddenly (not expected). Both momentum indicators are still in their negative zones although very close to their neutral lines. Both are also above their positive trigger lines. The volume indicator has just moved very slightly into new recovery highs and above its positive trigger line in keeping with the Index move. Although not quite at a full bullish rating, the long term ratings for both Indices have now improved to the + NEUTRAL level, one step below a full bull.

As for the intermediate term all is still a-okay. The Daily Index remains above its positive sloping moving average line. The momentum indicator remains in its positive zone above its positive trigger line. The volume indicator is moving higher above its positive trigger line. Putting it all together the intermediate term rating remains BULLISH. The short term moving average line is confirming this bull by remaining above the intermediate term line.

On the short term things are likewise. The Daily Index is above its positive sloping moving average line. The momentum indicator is in its positive zone above a positive trigger line. The only caution is the daily volume action, which remains very low. However, putting it all together the rating remains BULLISH. The very short term moving average line remains above the short term line for confirmation of this bull.

Looking at the chart and trying to determine which direction may be the one with the least resistance and the most logical trend direction is, as always, a guessing game. The price trend is upwards but seems to be hitting resistance. The Stochastic Oscillator is moving aggressively higher but here too it is entering its overbought zone and may dull any further upside move. I see too much entering negatives that have not yet shown their face but are just around the corner that I think I will stick with the lateral again, although the existing direction is to the up side and as a technician I should heed the existing trend.


Anonymous said...

Merv, you hit the nail on the head regarding stock losses and looking at the chart in hindsight. I think the losses for most people are a combination of a lack of experience and discipline. (The discipline is not placing a stop loss after the purchase).

In the US, these stocks trade on the 'pink sheets' market and often have low volume compared to the Canadian markets. With the low volume, it may be hard to sell when you need to.

Do you know of any US investors that have opened a Canadian stock account to specifically trade gold/silver/uranium stocks?

Merv said...

I am not an expert on trading IN the U.S. but that should not be a problem. Almost every reasonable sized broker in the U.S. should have the ability to trade in Canadian exchange stocks. Here in Canada I know of no brokers who do not have branches in the U.S. for Canadians to trade in U.S. stocks, or at least has arrangements with partners in the U.S. for that purpose. If your broker does not have Canadian trading options, I would be inclined to change brokers.

You are right about Pink Sheet activity being very often low volume. For that reason I do not follow Pink Sheet stocks although many also trade in Canada as their primary exchange.