for week ending 15 October 2010
Merv’s Daily Uranium Index
Market Data for Friday 15 Oct 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.
Day by day things seem to be going pretty slow but when you look at the big longer term picture the move has been quite good, at least since the low was reached in early July (see chart previously posted). All of the long term indicators are very positive, even the long term volume indicator, which is into new all time highs exceeding its previous peak from late last year during this past week.
Some of the more aggressive stocks have been making some super gains. Although I have not been posting any individual stocks for some time, priorities and such, I hope many of my readers have been following the weekly tables of technical information and acting on the intermediate term ratings. Although these ratings may not be precise and do often turn on you one can do a lot worse than following their lead. As an alternate, I had in the past mentioned the cross over of the short term moving average line (the 15 day weighted moving average or the 10 day simple average line) through the intermediate term moving average line (the 65 day weighted moving average line or the 50 day simple line). Whether you use the weighted averages or the simple ones the results are not much different, however, do not mix them up at the same time.
The Daily Index has now gone through most of its resistance zone but still has that upper level below 198 to overcome. As for the Weekly Index, except for those first few weeks in Jan of this year the Weekly Index is right at the top of its resistance zone. Only a minor additional advance would cause it to break through, but there still are those few Jan weeks of action.
The Merv’s Daily Uranium Index closed on Friday with a gain of 1.57 points or 0.85%. There were 28 daily winners, 19 losers and only three stocks totally confused. Cameco gained 0.9%, Extract gained 13.6%, Fronteer lost 1.3%, Paladin gained 2.5% and Uranium One gained 0.5%. The best daily winner was (no, not Extract) Energy Fuels with a gain of 21.6% while the loser of the day was Pele Mountain with a loss of 8.6%. Market Vectors Nuclear Energy ETF lost 0.2%.
For the week as a whole the Merv’s Weekly Uranium Index gained 7.10% (the Daily gained only 3.95% on the week). The smaller stocks continue to roar. There were 36 weekly winners, 11 weekly losers and 3 stocks totally confused. Cameco gained 2.4% on the week, Extract gained 15.3%, Fronteer lost 1.2%, Paladin gained 11.0% and Uranium One gained 5.8%. The best weekly winner was Energy Fuels with a weekly gain of 82.4% (its up over 240% since the 15 DMAw line crossed above the 65 DMAw line or 260% since the table intermediate term rating went POS, that’s in only 3 months). The worst weekly loser was Pele Mountain with a loss of 17.9%. Market Vectors Nuclear Energy ETF gained 1.8% on the week.
Everything long term wise is in positive territory so no use to waste much time here. Although the Weekly or Daily Indices are yet to reach new bull market highs the Momentum and Volume indicators are now comfortably above their previous highs and are in new bull market high territories. You might look at this as positive divergences. The long term rating for both Indices can only be BULLISH.
On the intermediate term all is A-OKAY. The Daily Index is well above its positive sloping moving average line. The intermediate term momentum indicator has just entered into new bull market highs and remains in its positive zone above a positive sloping trigger line. The volume indicator is also in new bull market highs and above its positive trigger line. The intermediate term rating can only be BULLISH. The short term moving average line is, of course, confirming the rating by remaining above the intermediate term line.
As for the short term, reversals of trend usually start here so is it starting? Nothing yet is giving any strong warning of a turn around BUT there is some warning that the present trend is overheated. The Daily Index is nudging up against that resistance line of the up trending channel. That resistance just might cause the Index to react to lower levels for a while. The Daily Index remains above its positive sloping moving average line. The short term momentum indicator remains in its positive zone above its positive trigger line. The indicator is once more inside its overbought zone, it keeps bouncing in and out. It has set up a support level just below the overbought line which is not a level to watch for a warning of a short term reaction in progress. The daily volume action is trying to perk up on the up side but is still giving us a somewhat mixed message. Still, with all the warnings and reversal potentials the short term rating must remain BULLISH. The very short term moving average line confirms this.
As for the immediate direction of least resistance, the Stochastic Oscillator (SO) is giving us a warning of continuing strength decrease as the Daily Index moves higher. Since its initial peak in the overbought zone in mid-July every succeeding peak in the overbought zone has been very slightly lower and lower. This past week the SO could not quite make it into the overbought zone so maybe the top is very, very close. I will go with the lateral direction for Monday and see what happens then.
As time permits I will try to post a few individual stocks during the week, they may be stocks that are not in the Index but I’m not sure yet which ones will be posted.