Merv’s Weekly Uranium Review
for week ending 03 June 2011
Merv’s Daily Uranium Index
Market Data for Friday 03 Jun 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 bounce off the previous low level lasted a little over a week and now we are back to the down side. Just my guess but I still don’t think that the down side will penetrate into new low levels. That previous intra-day low of March 15th is still expected to hold. If it does so and we do end up with a rally from these levels then that would be very significant. We would then have what technicians call a double bottom, a strong bullish pattern. Although the long term momentum indicator still provided a negative lower low at the Index recent low point the other momentum indicators indicate a strengthening in the Index at that low. The intermediate and short term indicators had higher lows than the plunge low. The volume indicator continues to make new bear market lows but this is more of a function of daily minor negative Index moves than any sudden negative volume action. The daily volume action itself is still very low, which is what one expects during a price (Index) decline.
The Merv’s Daily Uranium Index closed on Friday on the down side with a loss of 1.72 points or 0.94%. There were 15 winners, 25 losers and 10 stocks totally confused. Cameco lost 1.6%, Denison lost 2.4%, Extract was totally confused, Paladin lost 3.4% and Uranium One lost 0.3%. The best daily winner was a tie between Fission Energy and Pitchstone, both with gains of 10.34%. The worst loser was Powertech with a loss of 12.5%. Market Vectors Uranium + Nuclear Energy ETF lost 0.8% while Global X Uranium ETF lost 1.2%.
For the week as a whole the Merv’s Weekly Uranium Index lost 582.04 points or 8.74% (the Daily Index lost 4.68% on the week). There was only one weekly winner, 47 losers and 2 totally confused. Cameco lost 2.6%, Denison lost 10.5%, Extract lost 3.5%, Paladin lost 8.2% and Uranium One lost 9.5%. The best weekly winner out of that single one winner was, the single one winner, Altius with a weekly gain of 1.0%. The worst loser was Uracan with a weekly loss of 23.3%. Market Vectors Uranium + Nuclear Energy ETF lost 2.9% while Global X Uranium ETF lost 7.3%.
Looking at the long term charts and indicators there is still no real clear cut indication of a turn around in the making. Both Daily and Weekly Uranium Indices are below their negative sloping moving average line with no thought of moving above for at least another few weeks. The momentum indicators for both Indices are still in their negative zones and below their negative trigger lines. The Daily Index volume indicator is making new bear lows and remains below its long term trigger line. The only rating I can give the long term remains BEARISH.
Just a note. If you look at both of the long term charts posted earlier you will see how the momentum indicator was showing weakness as the Index moved into new highs and how they both dropped below their overbought lines and below a support before the Index really plunged. The uranium stocks were ready for a bear trend long before the problems in Japan.
On the intermediate term the Index came very close to breaking above the negative moving average line but turned back to the down side on Monday and remains there. The momentum indicator, although it started to firm up a bit before this past week, is in its negative zone and has once more dropped below a negative trigger line. As for the volume indicator, it remains below its negative trigger line. All in all, the intermediate term rating remains BEARISH. This rating is confirmed by the short term moving average line remaining below the intermediate term line.
The short term was starting to look encouraging but this week killed all that. With every day being a bummer it’s not surprising that we are once more in short term negative territory. The Daily Index closed on Friday once more below its moving average line and the line has just turned very slightly downward. The momentum indicator has again dropped into its negative zone and below its negative trigger line. As for the daily volume action, it remains very low as can be expected. The short term rating is once more BEARISH but without confirmation yet from the very short term moving average line. Although the very short term line is head lower it has not quite breached below the short term line. That could be another day or two.
As for the immediate direction of least resistance, that would normally be to the down side with the recent action but since the Daily Index is so close to a strong support I will go once more with the lateral direction before getting too bullish or bearish from here.