for week ending 22 October 2010
Merv’s Daily Uranium Index
Market Data for Friday 22 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.
Before getting into the commentary, Kim Inglis of Canaccord Wealth Management had quite an interesting and positive commentary on the uranium situation and what it might mean for uranium stocks going forward, in the FP Investing section of the Saturday Edition of the Canadian Financial Post. The article is called Put Uranium on your Radar Screen. Go to the www.nationalpost.con web site, click on the today’s paper link and scroll down to the Financial Post Investing section. It should give you a lift after all the misery over the past couple of years.
The week ended on a questionable note but it was, in the end, a positive week for the uranium stocks with some pretty hefty gains in the lower priced stocks (see the Weekly Table posted earlier). The higher priced stocks, well that’s a different story. The Daily Index (representing the higher priced stocks) gained 1.61% on the week while the Weekly Index (representing the lower priced stocks) gained 8.42%. The difference tells us where one should be if one were looking for performance rather than just being able to tell your friends that you are into uranium stocks and are sitting there with your Cameco shares.
The long term Daily Index chart posted earlier shows the Index still not yet into new recovery high territory while the Weekly Index is zooming into new highs. The Weekly chart posted last week had the week ending 15 Oct data missing and showed only the action up to the week ending 08 Oct. This week’s chart catches up. Both long term momentum indicators are moving into new highs with both now at a level not seen since the Indices reached their all time highs and started downwards in early 2007. Things are looking up.
The Merv’s Daily Uranium Index closed higher on Friday by 1.06 points or 0.57%. There were 27 daily winners, 21 losers and only 2 stocks confused. Cameco gained 0.5%, Extract gained 5.7%, Fronteer gained 0.3%, Paladin gained 6.7% and Uranium One gained 0.5%. The best daily winner was CanAlaska with a gain of 20.0% while the worst daily loser was Uranium Energy with a daily loss of 8.9%. Market Vectors Nuclear Energy ETF gained 0.8%.
As for the full week, the Merv’s Weekly Uranium Index closed higher by 511.99 points or 8.42% (the Daily gained only 1.61% on the week). There were 34 weekly winners, 21 losers and only one stock confused. Cameco lost 1.7% on the week, Extract gained 4.8%, Fronteer gained 0.7%, Paladin gained 5.9% and Uranium One lost 0.5%. There were 14 double digit winners during the week, the best of them being Pele Mountain with a gain of 90.6%. There were 4 double digit losers during the week, the worst being Ucore Rare Metals with a loss of 17.5%. Market Vectors Nuclear Energy ETF gained 0.2%.
Just a quick look at the long term charts posted earlier would tell you that both Indices are gung-ho on the up side and that the only interpretation of the charts would be that they are in long term BULLISH trends. No need to go further.
On the intermediate term the Daily Index seems to be so positive one would be surprised that there might be any negatives in the indicators. Well, there are but nothing yet to worry about from the intermediate term perspective. The Daily Index remains well above its positive sloping moving average line. The intermediate term momentum indicator is also well inside its positive zone and very slightly above a still positive sloping trigger line. However, a very close look at the indicator shows us that it was not able to make a new high on Wednesday along with the Index. It is starting to show some weakness in the latest Index move and something to watch. This weakness is more noticeable in the short term chart posted here. The volume indicator remains quite positive moving into new all time highs during the week and remains above its positive trigger line. All in all, despite some minor (at this time) weakness showing up the intermediate term rating remains BULLISH. The short term moving average line remains way above the intermediate term line for confirmation of the bull.
On the short term changes get noticed here first. The Daily Index has been bouncing off the short term moving average line all week but always ends up closing above the line. At some point it has to zoom ahead or close below the line. The line remains sloping upwards at this time. The short term momentum indicator has been toying with the overbought line all week but at the end of the week finished just a hair above the line. More importantly, it remains above its support level that has been established over the past few weeks. Although still inside the overbought zone the indicator has dropped below its trigger line and remains below despite a couple of up days. The trigger is also in a negative slope. The daily volume action has perked up this past week but it’s a little difficult to assess if it is a positive or negative sign at this time. In any case putting the indicators together the short term rating remains BULLISH although getting seriously weaker. The very short term moving average line remains above the short term line for confirmation of the bull.
As for the immediate direction of least resistance, one might go with the down side here. The Stochastic Oscillator is showing the weakness entering into the momentum of the action this week by its lower values versus last week while the Index itself is higher. I’ll play it safe and go with the lateral direction for another day and see what happens on Monday.
I will be on the move for the next couple of weeks so posting will be somewhat sporadic.