Merv’s Weekly Uranium Review
for week ending 04 March 2011
Merv’s Daily Uranium Index
Market Data for Friday 04 Mar 2011
Open: 266.05
High: 269.40
Low: 261.73
Close: 264.66
Volume: 5699
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.
This really was a lateral drift type of week. Looking at the short term chart above the action was almost all lateral with a slight negative tinge to it. Although the Daily Index went nowhere during the week the Weekly Index did decline indicating the more speculative stocks took most of the drubbing during the week. As we will see during the analysis below, the long term still remains far from any danger of reversal while the intermediate term is quite iffy and the short term even more so. So let’s get to it.
The Merv’s Daily Uranium Index closed on Friday down 0.88 points or 0.33%. There were 13 winners, 25 losers and a whole lot (12) of bummers. Cameco gained 0.3%, Denison lost 1.3%, Extract lost 0.4%, Paladin was a bummer and Uranium One gained 0.2%. The best daily winner was Wealth Minerals with a gain of 11.9% while the loser of the day was Ucore Rare Metals with a loss of 13.4%. Market Vectors Uranium + Nuclear Energy ETF lost 0.7% while Global X Uranium ETF lost 0.3%.
For the full week the Merv’s Weekly Uranium Index closed lower by 234.24 points or 2.17% (the Daily closed with a weekly loss of only 0.58%). There were 18 weekly winners, 29 losers and 3 bummers. Cameco lost 1.9% on the week, Denison lost 1.1%, Extract gained 2.8%, Paladin lost 2.2% and Uranium One gained 4.0%. The best weekly winner was Rockgate Capital with a weekly gain of 13.5% while the loser of the week was Energy Fuels with a loss of 20.0%. Market Vectors Uranium + Nuclear Energy ETF gained 0.6% while Global X Uranium ETF gained 0.4% on the week.
Looking at the weekly charts posted earlier both Indices are well above their respective positive sloping moving average lines. Both Indices long term momentum indicators remain well in their positive zones BUT both had been in their overbought zones and have now turned downward and dropped below their overbought lines. This suggests that a reaction may be in progress. For now such reaction, if it is in progress, is not expected to reverse the rating for some time, if at all. The long term ratings for both the Daily and Weekly Indices remain BULLISH.
On the intermediate term although everything looks positive there are signs of trouble. The Daily Index is just a shade above its still positive sloping moving average line but that could change with only one day of decent negative activity. The momentum indicator remains in its positive zone but below its negative trigger line suggesting the trend is towards the neutral line and below. The volume indicator is also not all that positive, in fact it is moving lower and is below its negative trigger line. Although the indicators still give us a BULLISH intermediate term rating the direction of motion at this point in time is towards the negative. The short term moving average line confirms this bull by remaining above the intermediate term line but not by much. Things could change here with a day or two if the Index should go negative.
On the short term things are even more negative. The Daily Index remains slightly below its negative sloping moving average line. The momentum indicator remains in its negative zone (although moving sideways) but is just very slightly above its positive trigger line. The daily volume action remains very low as might be expected during a dull period. The rating is therefore BEARISH with the very short term moving average line confirming by remaining below the short term line.
As for the immediate direction of least resistance, one can only go with the lateral at this time. The Index has been moving in a narrow box for almost two weeks now and until it gets out of that narrow box the trend remains lateral.
for week ending 04 March 2011
Merv’s Daily Uranium Index
Market Data for Friday 04 Mar 2011
Open: 266.05
High: 269.40
Low: 261.73
Close: 264.66
Volume: 5699
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.
This really was a lateral drift type of week. Looking at the short term chart above the action was almost all lateral with a slight negative tinge to it. Although the Daily Index went nowhere during the week the Weekly Index did decline indicating the more speculative stocks took most of the drubbing during the week. As we will see during the analysis below, the long term still remains far from any danger of reversal while the intermediate term is quite iffy and the short term even more so. So let’s get to it.
The Merv’s Daily Uranium Index closed on Friday down 0.88 points or 0.33%. There were 13 winners, 25 losers and a whole lot (12) of bummers. Cameco gained 0.3%, Denison lost 1.3%, Extract lost 0.4%, Paladin was a bummer and Uranium One gained 0.2%. The best daily winner was Wealth Minerals with a gain of 11.9% while the loser of the day was Ucore Rare Metals with a loss of 13.4%. Market Vectors Uranium + Nuclear Energy ETF lost 0.7% while Global X Uranium ETF lost 0.3%.
For the full week the Merv’s Weekly Uranium Index closed lower by 234.24 points or 2.17% (the Daily closed with a weekly loss of only 0.58%). There were 18 weekly winners, 29 losers and 3 bummers. Cameco lost 1.9% on the week, Denison lost 1.1%, Extract gained 2.8%, Paladin lost 2.2% and Uranium One gained 4.0%. The best weekly winner was Rockgate Capital with a weekly gain of 13.5% while the loser of the week was Energy Fuels with a loss of 20.0%. Market Vectors Uranium + Nuclear Energy ETF gained 0.6% while Global X Uranium ETF gained 0.4% on the week.
Looking at the weekly charts posted earlier both Indices are well above their respective positive sloping moving average lines. Both Indices long term momentum indicators remain well in their positive zones BUT both had been in their overbought zones and have now turned downward and dropped below their overbought lines. This suggests that a reaction may be in progress. For now such reaction, if it is in progress, is not expected to reverse the rating for some time, if at all. The long term ratings for both the Daily and Weekly Indices remain BULLISH.
On the intermediate term although everything looks positive there are signs of trouble. The Daily Index is just a shade above its still positive sloping moving average line but that could change with only one day of decent negative activity. The momentum indicator remains in its positive zone but below its negative trigger line suggesting the trend is towards the neutral line and below. The volume indicator is also not all that positive, in fact it is moving lower and is below its negative trigger line. Although the indicators still give us a BULLISH intermediate term rating the direction of motion at this point in time is towards the negative. The short term moving average line confirms this bull by remaining above the intermediate term line but not by much. Things could change here with a day or two if the Index should go negative.
On the short term things are even more negative. The Daily Index remains slightly below its negative sloping moving average line. The momentum indicator remains in its negative zone (although moving sideways) but is just very slightly above its positive trigger line. The daily volume action remains very low as might be expected during a dull period. The rating is therefore BEARISH with the very short term moving average line confirming by remaining below the short term line.
As for the immediate direction of least resistance, one can only go with the lateral at this time. The Index has been moving in a narrow box for almost two weeks now and until it gets out of that narrow box the trend remains lateral.
3 comments:
Hi Merv,
Did you have 50 Uranium stocks in your index in 2003 when you started your index?
I know that your index of 50 stocks has changed over time and criteria has also changed the stocks within the index.
It may not make any difference at all, but the rise of the Index in this bull market has different stocks in the index compared to the last bull market rise.
Great analysis as usual.
I'm going by memory here so the times and info may not be exact. I originally developed the Uranium Index in 2006 to show the performance of the uranium stocks being followed by Doug Casey. If you Google Merv's Daily Uranium Index you will see many references to the initial reference and chart in Doug Casey's comments at the time. I used the Casey stocks at that time and back-tracked the Index to get an historical perspective. I think that at the time there were 50 or 51 stocks in the Index. Shortly thereafter the Index went through a review and my 50 stock format was set. Over time many stocks have been changed. This is the nature of the uranium industry as most companies are relatively small and many go through periods of inactivity.
Thanks for the background info Merv... I don't recall ever reading that particular parcel of information years ago, but my memory these days is not what it use to be.
On another note, it looks like the negative sloping RSI finally affected the index price to the downside. We had a divergence going for a little while... Guess it was a matter of time before the U308 stocks broke down.
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