Uranium Companies

There are very few pure uranium companies. Most companies, especially the small exploration type, are active in more than the uranium industry. This blog makes no attempt to guage the percentage of a companies activity that are related to the finding, mining or processing of uraniun. They all do, however, have some uranium activities (to the best of our review).

Merv's Uranium Indices

I have developed two Uranium Indices. They each have the same component stocks but are calculated using different methodologies. My weekly Index is based upon the average weekly performance of the component stocks. My daily Index is based upon the daily average of the component stocks open, high, low and close prices along with the daily average volume of all component stocks.

Click on the chart or table to enlage the view.

22 February 2011

Merv's Daily Commentary 22 Feb 2011

After The Close, 22 Feb 2011

Merv’s Daily Uranium Index
Market Data

Open: 271.53
High: 273.33
Low: 260.47
Close: 262.73
Volume: 10182

Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.

Ouch! One can see it coming but one still wishes it would never get here, but here it is. Now comes the question, is this the start of something major or only a short correction? The other question would be, is it only sentiment with the major market plunge or is it moving on its own accord?

I have no clue what is happening in the corporate world so have no idea if there is anything fundamental behind today’s move. In all likelihood we will know what drove today’s uranium stocks sometimes in weeks ahead, but that is no help for speculators today. I would caution you that any KNOWLEDGE as to why the markets dropped today will most likely be shown to be in error at a later time (when all would have forgotten the knowledge of today). Just follow the money, and the money is what is moving the markets.

The Merv’s Daily Uranium Index closed lower by 12.29 points or 4.47% (the average stock lost 6.4%). I don’t recall a loss this high since the plunge to the final bottom in Oct of 2008. Unfortunately, we are not in a similar situation as then. At that time we were at the end of a major bear market. Today may be only the start of a bear move. We’ll only know in later time. There were NO WINNERS today. ALL 50 component stocks in the Index were losers. That situation I don’t ever recall. Cameco lost 3.3%, Denison lost 9.6%, Extract lost 1.6%, Paladin lost 4.2% and Uranium One lost 1.8%. As mentioned, there were no winners today. The worst loser was Pitchstone with a loss of 16.4%. Market Vectors Uranium-Nuclear Energy ETF lost 4.0% and Global X Uranium ETF lost 5.5%.

Despite today’s plunge in the Daily Index it closed the day still above its posiyive moving average line, but not far above as the chart shows. The momentum indicator is plunging lower with the Index and is well below its negative trigger line but still finished the day above its neutral line in the positive zone. The volume indicator is starting to move lower and has crossed below its intermediate term trigger line but the line is still in a slight upward slope. The intermediate term rating remains BULLISH for at least another day. The short term moving average line confirms that rating. However, things could start to change negatively in another day or two if the markets continue lower.

On the short term, well that’s another story. The Daily Index has decisively moved below its moving average line and the line is in a negative slope. The momentum indicator has moved into its negative zone and is moving lower below its negative trigger line. The daily volume action is now perking up, unfortunately on the down side. The short term rating is now a full BEARISH rating with the very short term moving average line confirming the bear by moving below the short term line.

As for the immediate direction of least resistance, it is only too easy to say the down side so I’ll say it, the down side. THAT should turn the market around.


Anonymous said...

I think we will look back at this correction and see that it was a buying opportunity. (After it has bottomed out)

Even the long term run-up between 2004 and 2007 had some pretty good sized corrections on the way up.

Anonymous said...

Merv, I have a question if you don't mind.

Does a short term bear retracement (correction) in a long term bull trend go back 1/3 or 2/3 of its' increase? I'm not sure how to get the answer so if you could put it in the daily commentary I would be most appreciative.

Thanks for your very wise technical commentary. I read it daily.

Anonymous said...

For Anonymous 2, take a look into Fibonacci retracments. There is a lot of information on this topic.

I asked Merv last year about the use of Fibonacci's and he had an interesting story behind it. I'm not sure he uses the tool though.

I personally do and find that a very high percentage of stocks and commodities follow the fibonacci trends/numbers.

Merv said...

The third Anonymous has it about right. There are many different technical indicators that make use of the Fibonacci numbers. My moving averages and trigger lines are mostly Fibonacci numbers.

I will try to ellaborate on the use of Fibonnaci numbers (and maybe mention the "interesting story" again in an upcomming daily commentary, as time permits.