Merv's Weekly Commentary 10 July 2011

Merv’s Weekly Uranium Review

for week ending 8 July 2011

Merv’s Daily Uranium Index

Market Data for Friday 8 Jul 2011

Open: 175.61

High: 177.20

Low: 172.23

Close: 174.32

Volume: 3127

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.

I guess you have noticed that I have not been posting lately. There is just nothing happening to post about. One can only say the same thing so many times before it gets monotonous. Anyway, until some starts to happen during the week those postings will continue to be limited. We still have the weekend posting for an overall summary of events, from the technical perspective.

Uranium itself continues to be in a dive so that may be part of the problem here. Of course, it is expected that the stocks will move ahead of the metal so we keep watching here.

The Merv’s Daily Uranium Index closed on Friday with a loss of 1.35 points or 0.77%. There were 9 winners, 33 losers and 8 stocks asleep. Cameco lost 0.2%, Denison lost 2.6%, Extract gained 2.5%, Paladin lost 1.5% and Uranium One lost 2.7%. The best winner of the day was Strathmore with a gain of 9.7% while the loser of the day was JNR with a loss of 7.4%. Market Vectors Uranium + Nuclear Energy ETF lost 1.1% while Global X Uranium ETF lost 1.0%.

For the full week the Merv’s Weekly Uranium Index closed with a gain of 367.05 points or 6.77% (the Daily Index gained 3.21% on the week). It was a week where the more speculative stocks set the pace. There were 34 weekly winners, 10 losers and 6 sleepers. Cameco was a sleeper, Denison gained 2.7%, Extract gained 1.2%, Paladin gained 3.1% and Uranium One gained 9.1%. The best weekly winner was Pele Mountain with a weekly gain of 50.0% while the loser of the week was JNR with a loss of 7.4%. Market Vectors Uranium + Nuclear Energy ETF gained 0.5% while Global Uranium ETF gained 4.1%.

Looking at the chart of the Daily Index there does not seem to be any significant patterns to see except for a very short term double bottom, which has almost reached its projected move. So, on to the indicators.

LONG TERM

Trend: Both the Daily and Weekly Indices continue to trade below their long term moving average lines and the lines continue in a negative direction.

Strength: The long term momentum indicators for both Indices remain in their negative zones but have moved above their trigger lines. The trigger lines have also turned to the up side.

Volume: The volume indicator continues below its negative sloping long term trigger line.

The long term rating remains BEARISH as of the Friday close.

INTERMEDIATE TERM

Trend: The Daily Index is busting it’s a—trying to get through that intermediate term moving average line but as of the Friday close it has not been able to break through. It remains just below the moving average line and the line remains in a negative slope.

Strength: The intermediate term momentum indicator remains in its negative zone but has moved above its trigger line. The trigger is also in a positive slope.

Volume: Although the volume indicator is basically in a lateral trend it has moved slightly above its intermediate term trigger line although the trigger remains in a negative slope.

As of the Friday close the intermediate term rating remains BEARISH but close to improving. The short term moving average line remains below the intermediate term line for continued confirmation of this bear.

SHORT TERM

The short term looks pretty good from the indicator’s standpoint.

Trend: The Daily Index is above its positive sloping short term moving average line.

Strength: The short term momentum indicator is now in its positive zone and above its positive sloping trigger line.

Volume: The daily volume action is still the indicator of concern. During a rally one likes to see the volume steadily increase as the price increases. The daily volume is just sitting there at a pathetic low level. Speculators are still not fully convinced that a real rally leading to a new bull move is in progress. It’s a wait and see game for now.

On the Friday close the short term rating is now BULLISH. This is confirmed by the very short term moving average line being above the short term line.

As for the immediate direction of least resistance, unfortunately it does look like the rally might have petered out. The Stochastic Oscillator had moved into its overbought zone but is now below its trigger line and below its overbought line. This too often suggests a very short term rest or reaction very soon. I’ll go with the lateral direction for a day or two and see how this SO progresses.