for week ending 11 February 2011
Merv’s Daily Uranium Index
Market Data for Friday 11 Feb 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.
Sorry about the delay in posting the week-end commentary, it was unavoidable.
We couldn’t have any more of a graphic representation of a topping activity then we see in the Daily Index. Of course, no indicator or chart pattern is perfect all the time but this is about as perfect of a topping as I’ve seen for some time. It may be topping but as yet the indicators have not said so. They might say caution but not disaster. So, let’s see what’s going on.
The Merv’s Daily Uranium Index closed on Friday on the down side by 0.98 points or 0.35%. There were 20 daily winners, 23 daily losers and 7 stocks chickening out. Cameco lost 1.6%, Denison gained 0.7%, Extract gained 0.1%, Paladin lost 1.9% and Uranium One lost 3.8%. The best winner of the day was the new stock Macusani Yellowcake with a gain of 8.3% while the loser of the day was Powertech Uranium with a loss of 5.7%. Market Vectors Uranium-Nuclear Energy ETF gained 0.2% while Global X Uranium gained 0.1%.
For the week the Merv’s Weekly Uranium Index closed the week with a loss of 188.91 points or 1.63% (the Daily Index had a weekly loss of 0.68%). There were 18 weekly winners, 30 losers and 2 stocks chickening out. Cameco gained 0.4% on the week, Denison gained 4.9%, Extract gained 0.5%, Paladin gained 1.3% and Uranium One lost 4.4%. The best weekly winner was Forsys Metals with a gain of 11.1% while the loser of the week was Xemplar Energy with a loss of 15.0%. Market Vectors Uranium-Nuclear Energy ETF lost 0.4% while Global X Uranium ETF lost 1.9%.
Despite the high possibility of a topping activity on-going the long term indicators are still far away from any danger of a reversal of trend. Both the Weekly and Daily Indices are above their respective long term moving average lines. Both Indices have their long term momentum indicators in the positive zone above positive trigger lines. The Daily Index volume indicator continues in near all time highs above its positive trigger line. What can I say except the long term rating remains BULLISH.
The intermediate term is also in no immediate danger of reversing its trend. It is, however, starting to weaken its trend. The Daily Index remains well above its positive sloping moving average line BUT has now moved slightly below its trigger line. The trigger is still pointing upwards for now. The volume indicator continues positively and remains above its positive trigger line. All in all the intermediate term rating remains BULLISH. The short term moving average line confirms this bull by remaining above the intermediate term line.
On the short term things are not quite as bright. The Daily Index does remain above its short term positive moving average line but the line is right up there with the Index and it would not take more than a day of negative action to move below the line. The momentum indicator is still very positive but it was in its overbought zone and has now moved below the overbought line and below its negative trigger line. As for the daily volume activity, that is relatively low, below its average volume action from the past 15 days but this is to be expected during a topping or negative trend. Still, the short term is rated as BULLISH with the very short term confirming the bull.
The immediate direction of least resistance is now to the down side. Beside the Daily Index dropping below a now negative very short term moving average line but the Stochastic Oscillator has been plunging and has moved into its negative zone. Doesn’t look good for the immediate period but nothing tells me that this will last for any length of time. However, I follow what the thousands of speculators are telling me by their actual trading activities.