for week ending 7 January 2011
Merv’s Daily Uranium Index
Market Data for Friday 7 Jan 2011
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, it’s back to work.
The Daily Uranium Index closed on Friday almost exactly where I left it before going on holidays. In the mean time it took a casual trip upwards and a sharper trip downwards. More and more it is looking like some kind of topping process. Since the Nov peak each succeeding Index peak has seen a lower and lower momentum peak. This is most noticeable on the intermediate term momentum chart but the short term also shows this decline in momentum. Although we are well above the Dec lows in the Index the momentum indicators are below their Dec lows. In fact the short term momentum indicator is even below its Nov lows. From the standpoint of movement strength things are not that rosy. We should expect a reaction or even a short or intermediate term correction in the Index. It has come a long way since July so a rest is in order. I don’t think that any rest period will turn out to be a disaster and new highs should follow.
The Merv’s Daily Uranium Index closed down on Friday, down 3.24 points or 1.31%. There were 15 winners, 29 losers and 6 out of the game. Cameco lost 3.7%, Denison lost 3.3%, Extract gained 1.7%, Paladin was not in the game and Uranium One lost 0.9%. The best winner of the day was Quest Rare Minerals with a gain of 11.2% while the loser of the day was Powertech Uranium with a loss of 10.3%. Market Vectors Nuclear Energy ETF lost 0.2% while the Global X Uranium ETF lost 0.7%.
For the week as a whole the Merv’s Weekly Uranium Index lost 444.67 points or 4.35% (the Daily lost 5.76% on the week). There were only 7 weekly winners, 39 losers and 4 not in the game. Cameco lost 6.2%, Denison lost 13.5%, Extract lost 6.3%, Paladin lost 1.0% and Uranium One lost 4.8%. The best weekly winner was Pele Mountain with a gain of 66.2% while the loser of the week was Crosshair Exploration with a loss of 20.1%. Market Vectors Nuclear Energy ETF lost 2.1% while Global X Uranium ETF lost 5.5%.
As we can see from the Table posted earlier it was not a good week for the stocks. Many were double digit losers but that’s the name of the game, you go up, you go down but hopefully up is higher than down is low (does that make sense?) It’s been a while so lets go through the routine and see where the uranium stocks stand at this point.
For the long term things are still very positive. The week had a negative effect on the Indices (both Daily and Weekly) but both are still comfortably above their respective positive sloping long term moving average lines. As for the long term momentum, that is also still very positive but the direction seems now to be towards the down side. It will take some time for this negative direction to get the indicators into their negative zones so not to worry from the long term. The volume indicator is following the track of the Daily Index and remains above its positive sloping trigger line. All in all both Indices are showing a continuing BULLISH long term rating.
For the intermediate term things also remain rosy but are getting closer to a trend reversal situation. The Daily Index remains above its intermediate term positive sloping moving average line but another week like this last one would put the Index below the line. The momentum indicator is still well inside its positive zone but is moving lower and below its already negative sloping trigger line. Another negative day and the momentum indicator could drop below its previous Nov low. As for the volume indicator, it has just dropped below its trigger line but the trigger is still in a positive slope. It would take another few days of negative activity for the trigger to go negative. Putting it all together we are still in a BULLISH phase as far as the rating is concerned. This bull is confirmed by the short term moving average line remaining above the intermediate term line.
On the short term things are not rosy at all. The Daily Index is below its moving average line and the line has turned downward. The momentum indicator slipped into its negative zone on Friday and is moving lower below its negative trigger line. The daily volume activity is no grade shakes but that is to be expected on negative market days. The short term rating is BEARISH. The only bright spot for today is the non-confirmation of the bear by the very short term moving average line. It is moving lower fast but has not quite made it below the short term line.
As for the immediate direction of least resistance, I must go for the down side. The Daily Index is in a negative trend showing no sign of a bounce. The Stochastic Oscillator has just broken very slightly into its oversold zone with no hint of a turn around yet. Maybe Monday will see some lateral activity but I’ll go with the down side.
Well. I think I’ll call it a day. That’s the most I’ve written in over two weeks. Where’s that calendar and when is my next holiday?