for week ending 06 May 2011
Merv’s Daily Uranium Index
Market Data for Friday 06 May 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 Indices were posted earlier and should be viewed during this commentary.
The uranium stocks had their sharp plunge a few weeks ago. The precious metal stocks are just catching up. Still, after the sharp rebound from the plunge it has been down hill ever since. This week was no different. For the week as a whole the more speculative stocks continued to take the brunt of the decline although on Friday, when the Daily Index perked up a bit it was the speculative stocks that advanced the most. Once the bottom is reached I would expect the speculative stocks (read pennies) to once more out perform the biggies. That time will come. It’s unfortunate that one has to go through frustrations to get there.
The Merv’s Daily Uranium Index closed higher on Friday by 2.62 points or 1.44% (the average stock (pennies) gained 3.0%). There were 35 winners, 8 losers and 7 stocks giving us the bum’s rush. Cameco lost 0.6%, Denison was giving us the bum’s rush, Extract gained 5.1%, Paladin gained 0.6% and Uranium One lost 2.4%. Market Vectors Uranium + Nuclear Energy ETF gained 0.6% while Global X Uranium ETF lost 0.4%.
For the full week the Merv’s Weekly Uranium Index lost 195.34 points or 3.01% (the Daily Index lost 2.18%). There were 12 weekly winners, 34 losers and 4 giving us the bum’s rush. Cameco lost 1.5%, Denison lost 4.5%, Extract gained 12.4%, Paladin lost 0.3% and Uranium One gained 4.8%. Market Vectors Uranium + Nuclear Energy ETF lost 3.9% while Global X Uranium ETF lost 3.6%.
Well, let’s get right down to it. From the long term perspective all is negative. Both the Weekly and Daily Indices are below their respective negative sloping moving average line. Both long term momentum indicators are in their negative zones and below negative trigger lines. The volume indicator is trending lower and is below its long term trigger line. I guess from all that one can only say that the long term rating is BEARISH.
Going to the Daily Index for the intermediate term indicators, the Index remains below its negative sloping moving average line. The Index itself is trending lower and remains within the confines of that negative sloping wedge pattern. Sooner or later, and at this time that should be sooner, the Index will have to break one way or the other from the pattern. The odds are for an upside break but let’s wait for it. The intermediate term momentum indicator continues to move gently lower in its negative zone. It remains also within the confines of a very tight downward trending channel. As well it remains below its negative trigger line although the trigger is very close to the indicator and the action has a tendency to move the indicator above and below the trigger depending upon the daily action. As for the volume indicator, it continues to track lower below its negative trigger line but things are getting close. As far as the rating goes, today the rating remains BEARISH. This is confirmed with the short term moving average line remaining below the intermediate term line.
On the short term things are getting a little mixed up now. The action is getting closer to some sort of recovery with some indicators starting to either turn around their direction if not their position and others very close to turning. For the past few weeks the Daily Index has been slowly moving lower all the time just below its negative moving average line. The momentum indicator has been basically in a lateral trend continually right on top of its oversold line. This past week it dropped below the line into the oversold zone but recovered after one day and ended the week just above the line. The indicator crossed above its moving average line although the line remains in a negative slope. As for the daily volume action, that remains very low and needs to really perk up if we are to get any significant recovery. For now the short term rating remains BEARISH with the very short term moving average line confirming.
As for the immediate direction of least resistance, that continues to be to the down side but not with any great enthusiasm. I will go with my more normal lateral guess as that could cover a great deal of action and I have a better chance of saying “I told you so”.