Merv’s Daily Uranium Index
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
The topping activity continues. We now have a very short term potential double top or a “box” pattern, take your pick. The upper and lower trend lines are now the defining levels to understand the direction of the market for the next few weeks; up, down or sideways. The continuing weakness in the momentum indicator suggests the down side as the most likely direction but I’ll wait for the break for confirmation.
The Merv’s Daily Uranium Index closed lower by 3.80 points or 1.54%. There were 9 winners, 38 losers and 3 going nowhere. With so many losers it’s surprising that the % Index drop was not more. Cameco lost 1.4%, Denison Mines lost 3.4%, Extract lost 2.7%, Paladin lost 1.0% and Uranium One lost 2.5%. The best of the few daily winners was Energy Fuels with a gain of 8.2% while the loser of the bunch was Titan Uranium with a loss of 13.2%. Market Vectors Nuclear Energy ETF lost 0.7% while Global X Uranium ETF lost 1.7%.
With the intermediate term moving average line still far from its positive moving average line and the momentum indicator still quite high in its positive zone the intermediate term rating of BULLISH is not in immediate danger of reversing. The momentum indicator has dropped below its overbought line and is below its negative trigger line so the strength is weakening and this is not the time for new intermediate term commitments but not a time to panic either.
The situation is a lot more precarious as far as the short term is concerned. The Daily Index closed just a shade above its still positive moving average line but one more day like today and that would change. The momentum indicator is still positive but below its negative trigger line. The daily volume action remains below the average of the past 15 days but this is to be expected during a weak market. Although the rating remains BULLISH it could change on another day like today. The very short term moving average line remains very slightly above the short term line for confirmation of the bull but also suggesting danger of a possible move below the line on another day of activity.
As far as the immediate direction of least resistance is concerned, I should go with the down side as all indicators point in that direction except that the Stochastic Oscillator perked up and moved above its neutral line into the positive zone. I’ll go with the lateral direction for another day as a cop-out.