Merv's Weekly Commentary 15 May 2011

Merv’s Weekly Uranium Review
for week ending 13 May 2011

Merv’s Daily Uranium Index
Market Data for Friday 13 May 2011

Open: 180.87
High: 181.98
Low: 176.99
Close: 178.60
Volume: 3598

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.

Blame it on Google. I WAS going to post on Thursday but Google Blogger was down and tens of thousands of bloggers were not able to access their site to update, me included. That’s my excuse and I’m sticking to it.

Another week has passed and still no bottom to this bear. However, it does look like the downer just might be coming to a close. The Daily Index is not far from its inter-day low of a few weeks back and this week the more speculative stocks which have been getting hit the hardest were the ones taking the least hit. Just might be an indication that speculators have had it with the down side and might be in the mood to get back into the game with many bargains to be had. We’ll grasp at any straw in the wind about now.

The Merv’s Daily Uranium Index closed on Friday with a loss of 1.57 points or 0.87%. There were 13 winners, 25 losers and 13 whiners. Cameco gained 0.3%, Denison gained 1.5%, Extract was whining the blues going nowhere, Paladin lost 3.2% and Uranium One lost 0.5%. The best daily winner was Pitchstone with a gain of 13.3% while the loser of the day was Forsys with a loss of 5.1%. Market Vectors Uranium + Nuclear Energy ETF lost 1.2% while Global X Uranium ETF lost the same, 1.2%.

For the full week the Merv’s Weekly Uranium Index lost 2.59% while the Daily Index lost 3.64%. There were 14 weekly winners, 33 losers and 3 whiners. Cameco lost 7.6% on the week, Denison lost 1.4%, Extract lost 5.0%, Paladin lost 3.5% and Uranium One lost 8.0%. The best winner of the week was Bannerman with a gain of 9.1% while the loser of the week was Powertech with a loss of 20.8%. Market Vectors Uranium + Nuclear Energy ETF lost 1.7% while Global X Uranium ETF lost 3.6%.

With 5 straight weeks of market decline all the indicators for the long and intermediate term are negative so no real analysis is required to rate both time periods as BEARISH. Let’s just go straight to the short term to see if there is some hope of a reversal soon. If any turn around is going to happen we will see it here first.

To start, 5 weeks of down action can’t be all good, but then again it can’t be all bad as we must be getting nearer and nearer to a bottom. The Daily Index continues to move lower below its negative moving average line, no surprise there. The momentum indicator has been tracing a more or less lateral path. It is well in its negative zone but continues to trace above its oversold line since the very first day’s of this plunge. It meanders above and below its trigger line and on the Friday close was below the trigger. The trigger line is also in a negative slope. The daily volume action is really nothing to write home about. It is evel lower than before the plunge. Low volume during a down move actually means not much. So, putting all this together we get a short term BEARISH rating with not much in the indicators to give us comfort. The very short term moving average line remains below the short term line for a bear confirmation. It has remained below the short term line since mid-Feb.

As for the immediate direction of least resistance, well that does have some positive possibilities. The Stochastic Oscillator is entering its overbought zone from where reversals are expected to get their start. It has not yet reversed its direction but that could be any day now. I’m going with the lateral direction as the most likely on Monday but the up side is a real possibility.