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.

19 September 2010

Merv's Weekly Commentary 19 Sept 2010

Merv’s Weekly Uranium Review
for week ending 17 September 2010

Merv’s Daily Uranium Index
Market Data for Friday 17 Sep 2010

Open: 168.94
Hugh: 170.26
Low: 165.02
Close: 166.99
Volume: 5926

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.

Let’s see now, the Daily Index advanced 0.73% this week while the Weekly Index advanced 5.48%. It looks like the speculative stocks were on the move while the quality or larger stocks were fast asleep. Looking through this week’s Table of Technical information we see that a good many of the smaller stocks were making gains in the 20%, 30% and even 40% range. One now must wonder if that’s it or it’s just the beginning.

I thought I’d show a short term P&F chart along with my normal short term chart. One can view the difference in the charts. They both convey a similar message but the P&F chart just shows the action filtered by the unit size and reversal criteria. I like the P&F charts but sometimes they are not very useful. During those times I just put them aside and go to something else.

Let’s just take a quick look at this short term P&F chart. We had a break-out at the 154 level that went nowhere and reversed for a whip saw effect. The next upside break came at the 152 level and we are still in this move. Both of the upside breaks gave projections to the 170 level. It is about an 80% probability that the initial projection will be met. Here it has been met. A follow on break came at the 158 level. Here we gat a projection to the 218 level. This is significant. If this projection should be met that means we will need to break into new recovery highs and projection very much higher will come into being. The most recent upside break at the 166 level gives us a projection to 206. Both these upside projections are very close and above previous rally highs. If we average out these two we are looking at the next level as the 212 level. These projections have a lower probability than the initial projection, i.e. less than an 80% chance.

The Merv’s Daily Uranium Index closed on Friday with a loss of 0.73 points or 0.44%. There were 17 daily winners, 21 losers and 12 stocks just bumming around. Cameco lost 0.3%, Extract lost 0.8%, Fronteer lost 1.9%, Paladin gained 2.3% and Uranium One lost 7.1%. The best daily winner was Uranium Resources with a gain of 8.0% while the loser of the day was Uranium One with that 7.1% loss. Market Vectors Nuclear Energy ETF lost 0.7%.

For the week as a whole the Merv’s Weekly Uranium Index gained 272.60 points or 5.48%. These are primarily the lower priced stocks performing. There were 29 weekly winners, 17 losers and 4 stocks just bumming around. Cameco lost 0.6%, Extract ended the week just bumming around, Fronteer lost 1.8%, Paladin lost 0.6% and Uranium One lost 9.3%. The best weekly winner was Formation Metals with a weekly gain of 41.6% while the loser of the week was Fission Energy with a weekly loss of 10.8%. Market Vectors Nuclear Energy ETF lost 0.4% for the week.

We are getting some minor differences between the long term performance of the Daily Index versus the Weekly Index. Both Indices are above their respective moving average lines and both lines are now pointing upwards. The Weekly long term momentum indicator is going gung-ho on the up side and is in its positive zone above a positive trigger line. The long term daily momentum indicator has just dropped into the negative zone but remains slightly above its positive sloping trigger line. The volume indicator has turned back to the down side but remains above its positive sloping trigger line. All in all BOTH Indices are still rated as BULLISH despite some minor differences.

On the intermediate term the Daily Index remains above its positive sloping moving average line. The momentum indicator is still nicely situated inside its positive zone but has now turned to the down side and dropped below its still positive trigger line. As with the long term the intermediate term volume indicator remains above its positive trigger line although the indicator itself has turned to the down side. On the intermediate term we are still at a BULLISH rating. The short term moving average line is still comfortably above the intermediate term line for confirmation.

On the short term the Daily Index is still above its positive sloping short term moving average line but not much above it. Friday’s daily low was even below the line before closing above. The momentum indicator had moved into the overbought zone and has now reversed and dropped below the overbought line. It is also below its now negative trigger line. The daily volume action is still corrupted by that one stock heavy volume but the daily volume is showing some signs of improving. On the short term we still are BULLISH. The very short term moving average line remains above the short term line (for now) but has turned to the down side. Still, it is confirming the short term bull.

As for the immediate direction of least resistance, I guess I will have to go with the down side after Friday’s action. The SO has now entered its negative zone. The Index has closed below the very short term moving average line and the line has turned downward. With the past three days on the down side a down trend has been established. There is nothing on the charts that would give me confidence of an immediate turn around. We’ll just have to take it one day at a time.


Anonymous said...

Hi Merv,

Thanks for the consistent U308 analysis. It's been quite a long road for those that have been following this particular sector for the last 3-4 years...

I have a question regarding entry points into these stocks. (Or any others) Have you found a combination of technical indicators that tell you when a good entry point is? There are so many indicators and combinations that it is hard to determine an entry point.

Also, do you determine a 'stop' by the last break low? Or by percentage? Or?


Merv said...

First, there is no such thing as a perfect technique for investing or trading stocks, fundamental or technical. The best one can hope for is a method that has a reasonable track record AND provides a warning to get out fast when you made a mistake, and all investors and speculators make mistakes. It's not a crime to make a mistake but it is a crime to let your losses continue to accumulate when you should be out of the game.

As for reasonable techniques. You could do worse than following the intermediate term ratings (POS/NEG/NEUTRAL) in the weekly tables for uranium stocks. One additional piece of advice would be to look at a chart to see if there is any resistance very close to the initial buy in point and wait for any such resistance to be breached.

If you are not interested in maximum gains but more interested in reduced risk, investing on a move through the long term moving average line is a very simple technique. I would wait for the line slope to turn upwards before buying in. A continuation buy would be when the price drops below a positive sloping moving average line and then within a couple of weeks moves back above the line. Buy on the move back above the line.

There are so many different techniques for investing, speculating and gambling that it would take a long time to go through them all. Keep things simple. One trend indicator, one momentum indicator and one volume indicator. That's all one needs for a simple technique.

Stops are another topic that could take some time to explain. Use the opposite indicators to the buy in ones. For more aggressive stops, use time periods for the indicators that are for a shorter period.

Maybe at some point I should present a summary of technical techniques on dull market days.

Hope that covers you concerns but most likely does not cover everything.

Anonymous said...

Hi Merv,

Thanks for your insight on entry points. I've been looking at Pinetree Capitol, Laramide, Paladin, Denison, UURE and USU.

I think that I have analysis paralysis. IMO, it seems like if your not in the top %10 of the traders, you'll end up giving your money to the brokers and the market makers...