for week ending 1 July 2011
Merv’s Daily Uranium Index
Market Data for Friday 1 Jul 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.
A happy 4th of July to all my American readers. Party, but stay sober, or at least don’t drive if you have had too much.
Today I am going to do basically what I did for my this weekend’s gold commentary (posted at various North American and European web sites each week). After my normal statistics I will summarize the indicators and produce the ratings. Not much different from the usual but in a slightly different format. So, here goes.
Before starting, when a market has been beat up as badly as the uranium market has we are prone to look for any sign that the end of the decline is at hand. It does seem like the Daily Index wants to move higher. The reaction over the past several days held above the June 20th low and the Thursday close is higher than the previous 22 June close. All this is from the strictly very short term basis but hey, all new trends start from the very short term basis. Let’s hope.
The Canadian exchanges were closed on Friday and the Daily Index has only a few stocks from the U.S. exchanges therefore the Daily Index ended the week at the Thursday close. For the Weekly Index the data used is the weekly closing data so that those stocks trading on the U.S. market show the Friday close while the rest are actually their Thursday close. Things should get evened out by Tuesday.
The Merv’s Daily Uranium Index closed on Thursday with a gain of 3.08 points or 1.86%. There were 32 winners, 14 losers and 4 stocks that still can’t figure out what to do. Cameco gained 1.5%, Denison gained 8.9%, Extract gained 1.9%, Paladin gained 2.8% and Uranium One gained 6.4%. The best Thursday winner was Rockgate with a gain of 12.8% while the worst Thursday loser was Mawson with a loss of 6.7%. Market Vectors Uranium + Nuclear Energy ETF gained 1.9% while Global X Uranium ETF gained 3.7%.
For the week ending Friday the Merv’s Weekly Uranium Index closed the week with a loss of 66.61 points or 1.21%. The Daily Index, however, gained on the week by 1.92%. There were 22 weekly winners. 24 losers and 4 stocks that still can’t figure out what to do. Cameco gained 4.0% on the week, Denison also gained 4.0%, Extract gained 8.8%, Paladin gained 1.6% and Uranium One lost 2.6%. The best weekly winner was USEC with a gain of 10.4% while the loser of the week was Macusani Yellowcake with a loss of 21.7%. Market Vectors Uranium + Nuclear Energy ETF gained 4.6% while Global X Uranium ETF gained 3.6%.
As a simple technician I basically look at three things to determine where we are in the market: trend, strength of trend (momentum) and volume activity behind the trend. Patterns are also reviewed where they appear important (to me).
Trend: Both the Weekly and Daily Indices are far below their negative sloping moving average lines.
Strength: Both long term momentum indicators (weekly and daily) are in their negative zones. Looking at the daily indicator it is starting to move higher and has crossed above its trigger line. The trigger has also very, very slightly turned to the up side.
Volume: The volume indicator has been moving steadily lower but seems to have perked up in the past few days. It is still below its negative sloping trigger line.
Putting all that into my secret formula I still get a BEARISH rating for both Indices on the long term.
Trend: The Daily Index remains below its negatively sloping moving average line. It is also in the middle of a negative sloping channel.
Strength: The intermediate term momentum indicator remains in its negative zone but is moving upward. It has already crossed above its trigger line and the trigger is in a positive slope.
Volume: The volume indicator is starting to move higher and has just reached a level very slightly below its negative sloping trigger line.
The secret formula gives us a rating that is still BEARISH. The short term moving average line remains below the intermediate term line for confirmation.
Trend: The Daily Index closed above its short term moving average line and the line is sloping upwards. The Thursday close is now at a new three week high so the direction looks to be to the up side.
Strength: The short term momentum indicator is moving upward rapidly but at the Thursday close is still slightly below its neutral line in the negative zone. It is above its positive sloping trigger line.
Volume: The daily volume action is still relatively low and not giving us any great message. If the Index continues higher while the volume remains low, that is a negative sign of lack of speculator interest and the trend can’t last long.
For Thursday the magic secret formula is now giving us a BULLISH rating for the short term. The very short term moving average line has moved above the short term line for confirmation of this bull.
The weekend of two celebrations (Canada and the U.S.) has muddled the picture a bit as far as trying to guess the immediate direction for the uranium stocks. I’ll leave that guess for Tuesday.