for week ending 03 December 2010
Merv’s Daily Uranium Index
Market Data for Friday 03 Dec 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.
It’s still a long way to the previous bull market top but the Daily Index is on its way, as is the Weekly Index. This past week the Daily out performed the Weekly but that did not make up for the great performance of the Weekly since hitting its bottom in late 2008. The Daily Index is now still up only 29% towards its previous high while the Weekly Index is up 60% towards its previous high. The more speculative stocks have really been on a run. These are the ones most represented by the Weekly Index while the Daily Index mostly represents the higher priced stocks.
Many technicians live by patterns. Unfortunately I can’t really find any meaningful patterns at the present time so on to our normal indicators.
The Merv’s Daily Uranium Index closed on Friday on the down side by 1.15 points or 0.47%. There were 18 winners, 26 losers and 6 stocks not wanting to participate. Cameco lost 0.8%, Denison lost 0.3%, Extract and Paladin were not participating and Uranium One gained 1.3%. The best daily performer was Tournigan with a gain of 10.3% while the worst daily performer was CanAlaska with a loss of 9.0%. Market Vectors Nuclear Energy ETF gained 0.8%.
For the week as a whole the Merv’s Weekly Uranium Index closed with a weekly gain of 117.61 points or 1.26% (the Daily Index gained 2.06% on the week). There were 28 weekly winners, 20 losers and 2 stocks not participating. Cameco gained 0.2% on the week, Denison gained 1.2%, Extract gained 0.1%, Paladin lost 0.6% and Uranium One gained 3.0%. The best weekly winner was Formation Metals with a weekly gain of 31.4% while the loser of the week was Crosshair Exploration with a loss of 29.8%. Market Vectors Nuclear Energy ETF gained 3.8%.
With the Uranium Indices continuing to climb higher and higher it just goes without saying that the long term indicators and ratings remain positive. No use going through the drill. Both the Weekly and the Daily Indices are rated as BULLISH on the long term.
As far as the intermediate term is concerned, things are still quite positive here but not totally. The momentum indicator is in its overbought zone from where we can expect a reaction in the Index. At the same time it is at a lower level than at its Nov peak despite the Index being at new recovery high levels. Other than that the Daily Index remains well above its positive sloping moving average line and the volume indicator remains above its positive trigger line continuing its move into new high territory. The intermediate term remains BULLISH but with the initial warnings from the momentum indicator. The short term moving average line remains above the intermediate term line for confirmation of this bull.
On the short term the situation is very similar to the intermediate term The Daily Index remains above its positive sloping moving average line. The momentum indicator remains in its positive zone just very slightly above a positive trigger line. The momentum is also in its overbought zone but has turned downward. It has also given us a negative divergence warning versus the Index action. As for the daily volume action, that is worrying. It is lower than the peak volume from Nov. and seems to be getting lower. It could be that the speculators are starting to hesitate getting into the uranium stocks at this time and are pulling back. When they do this they usually go towards the higher quality stocks which seem to be what has happened this past week. Something to keep a close watch on. In the mean time the short term rating remains BULLISH with the very short term moving average line confirming the rating.
As for the immediate direction of least resistance, looking at the actions of the Stochastic Oscillator it is giving us a strong warning of loss of momentum in the recent Index action. I will go with the lateral direction for another day or so and see what transpires on Monday.