for week ending 10 December 2010
Merv’s Daily Uranium Index
Market Data for Friday 10 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.
Although the week ended on a down note we are still in a long term bull market as far as the uranium stocks are concerned. There may be a short term consolidation of recent gains but that may be more of an opportunity to get in on lower prices before the next leg of this market takes hold. In any respect, whether we think the market will move into new highs or not one should never fight the market trend. Understand the trend and go with it. The trick is not so much to understand the trend but to understand the trend relative to your investment or speculative time horizon. If you are a short term trader a minor reversal may be enough for you to get out and protect gains. If you are a longer term speculator you might ignore the short term moves while keeping your eye on the longer term. You places your bets, understands the play and takes your chances.
The Merv’s Daily Uranium Index closed Friday on an up note, up 2.51 points or 1.04%. There were 21 winners, 20 losers and 9 stocks having a beer and missing all the action. Cameco gained 2.3%, Denison gained 0.3%, Extract was having a beer, Paladin gained 1.4% and Uranium One gained 0.2%. The best daily winner was Benton with a gain of 11.3% while the loser of the day was Powertech Uranium with a loss of 5.4%. Market Vectors Nuclear Energy ETF gained 0.7% while the Global X Uranium ETF ended the day having a beer and going nowhere.
For the week as a whole the Merv’s Weekly Uranium Index closed the week with a weekly loss of 325.14 points or 3.44% (the Daily lost 0.06% during the week). There were 14 weekly winners, 35 weekly losers and only one pure stock having a beer all by himself. Cameco gained 2.8% on the week, Denison gained 1.2%, Extract gained 3.5%, Paladin gained 3.7% and Uranium One lost 12.9%. The best weekly winner was Rockgate Capital with a gain of 16.5% while the loser of the week was Wealth Minerals with a loss of 18.8%. Market Vectors Nuclear Energy ETF lost 0.2% during the week while the Global X Uranium ETF lost 1.0%.
I see I’m getting behind again so I’ll just cut to the chase as far as the analysis is concerned and focus on the changes.
On the long term both the Daily and Weekly Indices are far from any change in their long term status. Both continue with BULLISH ratings.
On the intermediate term the one point of interest is the momentum indicator. While the Daily Index was making new highs these past several days the intermediate term indicator was not confirming the Index. It never reached new highs and has given us a negative divergence warning. The long term momentum DID move into new high ground so it remained strong. Other than this momentum warning all the indicators remain positive with the momentum still in its positive zone BUT below a negative trigger line. The rating, however, remains BULLISH at this time with the short term moving average line confirming.
On the short term the Index closed above its positive sloping moving average line. The momentum indicator remains just above its neutral line in the positive zone but still below its negative trigger line. The daily volume action is low suggesting lack of speculator participation recently. However, the short term rating is BULLISH but could change quickly as the indicators are not all that into their positive zones. The very short term moving average line confirms the bull but is zeroing in on the short term average.
The Stochastic Oscillator is in its negative zone but looks like it wants to turn back to the up side. The recent Index action has been to the up side but not with any vigor. I would not be surprised if the Index moves higher from here but I will go with the lateral direction for another day.