for week ending 22 July 2011
Merv’s Daily Uranium Index
Market Data for Friday 22 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.
I blame it on the crummy hot weather, this lack of posting. Today (Sunday) it’s at least reasonable. I can hear all those global warning enthusiasts proclaiming, see-global warming. But I know it’s been hotter than this, and for more days. I’m not talking the U.S. but Montreal. Now, for the foreseeable future the temp looks very nice, at least that’s what the Environment Canada is telling us.
It was really an uneventful week up until Friday. On Friday we have seen some movement in the more aggressive stocks with the Daily Index climbing almost 3%. The chart is suggesting that we are breaking out of that several weeks of snooze activity and entering a new phase in the uranium stocks. Most of the movement has been in the more aggressive stocks and especially First Uranium which took off on Friday. I guess speculators are thinking that AngloGold Ashanti will make a run for First Uranium since they just bought a pile of First Uranium shares for $0.60 (first Uranium closed at $0.59 up 53% on the day).
The Merv’s Daily Uranium Index closed on Friday with a gain of 5.82 points or 3.32%. There were 41 daily winners, 5 losers and 4 with their heads stuck in the sand. Cameco gained 1.9%, Denison gained 10.2%, Extract lost 0.1%, Paladin gained 8.1% and Uranium One gained 8.3%. The best daily winner was First Uranium with a daily gain of 53.3% while the loser of the day was Vena Resources with a loss of 5.6%. Market Vectors Uranium + Nuclear Energy ETF gained 2.7% while Global X Uranium ETF gained 4.8%.
For the full week the Merv’s Weekly Uranium Index gained 346.41 points or 5.98% while the Daily Index gained 5.17% on the week. There were 34 weekly winners, 13 losers and 3 stocks with their heads in the sand. Cameco gained 7.5%, Denison gained 13.2%, Extract lost 0.1%, Paladin gained 10.2% and Uranium One gained 11.1%. The best weekly winner was First Uranium with a weekly win of 40.5%. The worst weekly loser was Xemplar Energy with a loss of 7.1%. Market Vectors Uranium + Nuclear Energy ETF gained 6.0% while Global X Uranium ETF gained 8.5%.
After a Friday such as we have had let’s see where the uranium stocks stand after the close.
Trend: Nothing much has changed in the long term. It takes more than a day or two of good activity to change the long term prognosis. Both the Weekly and Daily Indices remain below their negative sloping long term moving average lines.
Strength: Both momentum indicators remain in their negative zones but are moving upwards towards their neutral lines. Both are above their positive sloping trigger lines.
Volume: The volume indicator is starting to gain altitude but closed the week just a hair below its negative sloping trigger line.
The long term rating remains BEARISH but things seem to be heading towards some ratings improvement in the very near future.
Trend: After Friday’s move the Daily Index closed above its moving average line and the line has turned oh so gently to the up side.
Strength: The momentum indicator is gaining altitude rapidly but unfortunately it is still below its neutral line in the negative zone. It is, however, above its positive sloping trigger line.
Volume: The volume indicator has now gained altitude and has closed above its intermediate term trigger line. The trigger has also turned very slightly to the up side.
Although the momentum is still in its negative zone it is moving higher at a rapid pace and so the rating for the intermediate term is now BULLISH. The short term moving average line has just crossed above the intermediate term line for confirmation of this bull.
Trend: On the short term the Daily Index has been moving higher for most of the past 4 weeks. It is above its positive sloping short term moving average line and has now broken above the previous several weeks of lateral markets.
Strength: The short term momentum indicator is in a sharp climb in its positive zone and heading rapidly towards its overbought zone. It is above its positive sloping trigger line.
Volume: The daily volume action perked up on Friday but that just might be due to the activity in that one stock, First Uranium. Still it’s at a high point relative to recent action.
Taking it all together one can only rate the short term as BULLISH. The very short term moving average confirms this bull by moving above the short term average line.
Now what about the future, immediate like? One might be tempted to disregard Friday’s action as a result of one stock activity. However, there were 12 stocks that made gains in the double digit on Friday so the activity was somewhat more wide spread than one stock. I would think that there would still be a follow through on Monday but then we should see after that. If no follow through then the down side may be in force for at least a few days.