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.

06 February 2011

Merv's Weekly Commentary 06 Feb 2011

Merv’s Weekly Uranium Review
for week ending 04 February 2011

Merv’s Daily Uranium Index
Market Data for Friday 04 Feb 2011

Open: 280.84
High: 286.24
Low: 274.18
Close: 279.87
Volume: 9439

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.

Now that was some week particularly if you were into the cheepies. Why, oh why would anyone be risking their capital in Cameco (3.6% gain this week) when there were 29 stocks with weekly gains in the double digits. You could have thrown 3 darts at a copy of the table and come out with better gains overall than with CCO. Oh well there are all kinds of market participants.

As you might have guessed I am not enamored with the concept of buying “quality”. My lack of enamoration (is that a word?) came long ago when I first started to research the markets, this goes back to the ‘60s. I had taken courses in the market and in becoming a broker (actually a stock salesperson). I learned then why it is that brokers almost always recommended the “quality” issues and emphasize long term “investing” and forgo the concept of speculative stocks and trading, at least as recommendations to their clients. I’m talking about the 1960’s here. A course instructor gave us the real deal. If you recommend speculative stocks and the customer loses on the trade then he can sue you for recommending a stock not suitable for his portfolio and in all likelihood will win the suit. However, if you recommend a “quality” stock and he loses everything, there is no way (other than if criminal action was involved) that you can get suit and lose. There were several cases like this at the time in the L.A. area.

It’s getting late so I’ll forgo some additional history as to why I don’t do my own thing and not listen to the professionals in the industry (even though I might be considered just such a professional myself. Of course there are wonderful exceptions to any rule, right!). Maybe during the week I’ll have time for some chit-chat ruminations.

It was a very good week (except for Friday) and that initial projection to 300 is almost being met. If you noticed on Wednesday the P&F chart had a projection all the way to the 620 level. Don’t get too excited, it’s only a projection not a prediction. One can keep it in mind BUT do not focus on it and be blinded to the on-going daily and weekly market action. There could very easily be a vicious bear market before that projection comes to past. Just saying.

The Merv’s Daily Uranium Index closed on Friday with a loss of 0.78 points or 0.28%. There were 21 daily winners, 25 losers and 4 stocks bumming around. Cameco lost 2.4%, Denison lost 0.8%, Extract gained 1.4%, Paladin lost 2.4% and Uranium One lost 4.9%. The best daily winner was Uranerz Energy with a gain of 10.5% while the worst loser was Forsys Metals with a loss of 7.0%. Market Vectors Nuclear Energy ETF lost 0.6% while Global X Uranium ETF lost 0.3%

For the week as a whole the Merv’s Weekly Uranium Index had a very good week with a gain of 1414.90 points or 13.87% (the Daily Index closed with a weekly gain of 10.87%). There were 47 weekly winners, 3 weekly losers and no bums at all. Cameco gained 3.6% on the week, Denison gained 14.5%, Extract gained 7.5%, Paladin gained 7.4% and Uranium One gained 6.6%. The best weekly winner was Forum Uranium with a weekly gain of 61.5% while the worst weekly loser was Quaterra with only a 2.7% loss. Market Vectors Nuclear Energy ETF gained 6.8% while Global X Uranium ETF gained 9.9%.

I guess I could cut the analysis short by just saying that everything is gung-ho positive with all the ratings being bullish but that’s not what you are paying me those big bucks for. So, let’s take a quick look at the indicators.

For the long term both Indices are way up there in stratosphere territory versus where their long term moving average lines are. This could be a concern. One does not want to see the Index get that far way from the moving average. Sooner or later the two WILL start to converge which means that the Index will be taking a rest or reaction while the moving average starts to catch up. For now everything is going in the right direction. The long term momentum indicators for both Indices are well into positive territory and above positive trigger lines. The Daily Index volume indicator is reaching into new all time high territory and above its positive trigger line. What can I say, BULLISH long term rating.

On the intermediate term things are similarly rosy. The Daily Index is well above its positive sloping moving average line. The momentum indicator remains in its positive zone but has been warning of weakness in the recent Index action. It is bouncing higher this week and has moved above its positive trigger line. The volume indicator remains above its positive trigger line but not that much above. Needs to be watched. The intermediate term rating can only be BULLISH. The short term moving average line confirms the bull as it has been doing since it crossed above the intermediate term moving average line way back in July (see the long term Daily chart posted earlier).

On the short term things are also rosy but there are signs that the move may have just about exhausted itself. The Daily Index remains above its positive moving average line. The momentum indicator is in its positive zone above its positive trigger line. But look, it does seem to be starting a turn over towards the negative. Maybe in the next few days we might see some negative Index action. The daily volume activity perked up a little this past week but sporadically. Still, the short term rating remains BULLISH.

As for the immediate direction of least resistance, I’m going with the lateral since that seems to be the most likely direction if one hasn’t a clue. However, the Stochastic Oscillator seems to be in a turning mode but not yet fully turned around so maybe the negative direction is most likely, but I’ll still go with the lateral.

Two stocks were replaced this week, Fronteer (mentioned earlier) and Quest. I’ve had Quest on my radar for quite some time and could never quite get the company fully assessed as far as its uranium part was. I have deleted it until I find that it still has reasonable uranium activities. I was going to replace Fronteer with Mantra but found out that Mantra was being taken over so that was that. The new stocks are Macusani Yellowcake and Pitchstone (anonymous, how’s that for quick action). I did not go through a detailed review of all stocks and will be doing one shortly. Additional changes may occur then.

I’m blushing from many of the complements I’m getting. My wife is warning me that much more swelling of the head and I wouldn’t be able to get through the door. I’ll take my chances. Thanks all.

No time to double check for errors so please excuse if any errors are present.


Anonymous said...

Hi Merv,

A few more U308 companies to consider for your list. (You may be tracking them on the 'waiting' list)

Purepoint Uranium (Working with Cameco)
Bayswater Uranium

Virginia Energy was mentioned a few months ago.

I think it's OK to have a 'big head', especially when you can show your wife some of the profits you may have made from some of these U308 stocks... =}

Anonymous said...

Hi Merv,

For your next changes, may be you can have a look at VIRGINIA ENERGY RESOURCES INC. (CDNX: VAE.V ).

Kind regards,