Merv’s Weekly Uranium Review
for week ending 05 August 2011
Merv’s Daily Uranium Index
Market Data for Friday 05 Aug 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.
Why me, why always me? That has been said by many individuals over time. I got hit by another rouge virus. This time, for the first time, my netbook got hit. Just as I was getting ready for travel on Monday it hit. Took over all of my communications. Up to then I though my netbook virus protection was pretty good but I guess not good enough. My destination was Barrie Ont and on arrival I took the netbook to Staples for cleaning. Got it back on Friday and installed a new protection. I now have Kaspersky in both computers. It seems to work great with the desktop so hope it works just as good with the netbook. That’s my excuse for not posting during the week and I’m sticking to it.
I guess this is another one of those weeks we would just like to put behind us. The Daily and Weekly Indices closed the week at new lows since reaching its high in Feb. That is usually a death message but I’ll wait for the new low to be further confirmed before doing anything rash. The momentum indicators have not quite made it into new lows for some minor encouragement.
The Merv’s Daily Uranium Index closed the week with a loss of 2.50 points or 1.57% on Friday. There were 11 winners, 34 losers and 5 stocks going nowhere. Cameco gained all of 0.1%, Denison lost 7.1%, Extract went nowhere, Paladin lost 5.1% and Uranium One lost 3.6%. The best winner of the day was Strathmore with a gain of 7.3% while the worst loser of the day was Forum Uranium with a loss of 16.7%. Market Vectors Uranium + Nuclear Energy ETF lost 1.2% while Global X Uranium ETF lost 5.6%.
For the week as a whole, do you REALLY want to know? The Merv’s Weekly Uranium Index closed lower by 556.19 points or 9.62% (the Daily Index lost 9.42% on the week). Everything took a hit, quality and speculatives. There were only 3 weekly winners, 45 losers and 2 stocks going nowhere. Cameco lost 6.4% on the week, Denison lost 22.8%, Extract lost 5.6%, Paladin lost 18.0% and Uranium One lost 11.6%. The best weekly winner was Tournigan with a gain of 5.0% while the worst weekly loser was USEC with a loss of 37.2%. Market Vectors Uranium + Nuclear Energy ETF lost 11.3% while Global X Uranium ETF lost 16.9%. Not a good week at all.
The long term can be easily summed up as everything is negative. Both Indices are well below their negative sloping long term moving average lines. Both momentum indicators are in their negative zones below their negative trigger lines and the Daily Index volume indicator is at new lows below its negative trigger line confirming the Index move. All in all BOTH long term ratings are BEARISH.
For the intermediate term the same as for the long term. Therefore without going through the routine the intermediate term rating is BEARISH. At the end of the week the short term moving average line dropped below the intermediate term line for confirmation of the bear.
For the short term let’s take a more detailed look at the indicators.
Trend: What can we say, the Daily Index is well below its short term moving average line and the line is sloping downward. Nothing in the chart changes the trend picture.
Strength: The short term momentum indicator is in its negative zone below its negative sloping trigger line. It has also just entered into its oversold zone but has not yet shown any sign of reversing back above the oversold line. Being in the oversold zone is not that important except to note the oversold position of the Index. It becomes important when the indicator reverses and moves back above its oversold line. This then is an indication that the negative Index move may be about to reverse.
Volume: The daily volume action is perking up a bit but not by much. Unfortunately, this perk-up is occurring on the Index down moves. The daily volume action has moved above its average 15 day volume line for the past two down days of Index trend.
Putting all that together one must consider the short term rating as BEARISH with the very short term moving average line trading below the short term line for confirmation of this bear.
As for the immediate direction of least resistance, one would have to be very brave to really try to suggest one knows what that direction will be. My feel is that after a couple of down days as we have had a bounce of some sort is in order. The Stochastic Oscillator has been moving sideways just above its oversold line and not moving lower. This may suggest some strengthening in the internal Index action but we’ll have to wait and see. I’ll go with the lateral direction as the immediate direction.