Merv’s Weekly Uranium Review

for week ending 29 October 2010

Merv’s Daily Uranium Index

Market Data for Friday 29 Oct 2010

Open: 194.07

High: 197.29

Low: 191.59

Close: 195.08

Volume: 6148

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.

Well, that’s it for another week and if it wasn’t for the sharp move on Monday the Daily Index would have gone nowhere. In the end the Daily gained 3.69% on the week while the Weekly Index gained 6.03%. While the Daily Index is still fighting to break through its previous highs, decisively, the Weekly Index is well above its previous highs. As often mentioned here, it’s the more speculative, small priced, stocks that are really on the move. That’s where the gains have been made and will continue. However, nothing goes up forever and these stocks need a good rest period to consolidate their gains and get ready for their next thrust into new highs but when that time will come is anyone’s guess.

The Merv’s Daily Uranium Index closed up only 0.25 points or 0.13% on Friday. There were 14 winners, 25 losers and 11 stocks not going with any crowd. Cameco gained 1.1%, Extract was not going with any crowd, Fronteer gained 0.3%, Paladin lost 1.9% and Uranium One gained 1.0%. The best daily winner was Fission Energy with a gain of 7.9% while the worst loser of the day was Tournigan with a loss of 5.7%. A very narrow spread between the two that I don’t think I’ve seen for a long time. Market Vectors Nuclear Energy ETF lost 0.2%.

For the full week the Merv’s Weekly Uranium Index closed higher by 397.19 points or 6.03%. There were 37 winners and 13 losers with all stocks in one crowd or the other. Cameco gained 3.8%, Extract gained 7.1%, Fronteer gained 8.1%, Paladin lost 3.3% and Uranium One gained 8.9%. The best winner of the week was Continental Precious Minerals with a weekly gain of 28.3% while the loser of the week was Formation Metals with a loss of 9.4%. Market Vectors Nuclear Energy ETF gained 1.2%.

The long term indicators continue to be very positive with no end in sight. Both the long term Daily and Weekly Indices are above their respective positive sloping moving average lines. Both momentum indicators are in their positive zones and above their positive trigger lines. The Daily volume indicator continues to move ever higher in its new all time high territory and above its positive trigger line. Both Indices are therefore still very BULLISH.

On the intermediate term the Daily Index remains above its positive moving average line. The momentum indicator is comfortably inside its positive zone above its positive trigger line but not yet inside its overbought zone. The volume indicator remains moving above its positive trigger line. The only rating possible is a BULLISH rating for the intermediate term. The short term moving average line continues to confirm the rating, remaining above the intermediate term line.

On the short term we are starting to get some cautionary signs. The Index is now tracking a lateral path and not all that strong. It is, however, still above its short term moving average line and the line is still in a positive slope. As for the momentum indicator, it has been moving sideways for a couple of weeks now but continues to remain above its overbought line. The indicator has been moving above and below its trigger line while the trigger is in a basic lateral trend. The daily volume action has been above its 15 day average volume but on Thursday and Friday the volume decreased and while the Index climbed higher the volume moved lower. Still, nothing serious is happening on the short term yet but could any day. For now the rating remains BULLISH with the very short term moving average line confirming the rating.

As for the immediate direction of least resistance, that should, by all accounts, be to the down side but I will remain cautious and go with the lateral for another day.