for week ending 30 September 2011
Merv’s Daily Uranium Index
Market Data for Friday 30 Sep 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.
Another bummer of a week. Looking at the results it was, once more, the more speculative stocks that took the hardest hit. Sooner or later the bear will end and the sky will open up and the sun will shine and the birds will sing but not today.
The Weekly Indices posted earlier show my two Indices full history from the time of each development. The Weekly Index was the first to be developed starting way back in Jan of 2003 while the Daily Index was developed in late 2006. One sure can see the difference in performance of these two Indices. From the 2008 low to the high in early 2011 the Weekly Index rose over 500% while the Daily Index rose 200%. On the down side, however, the two Indices are not that far apart. The Daily has declined 55% while the Weekly declined 65% to this point. I find this performance similar to that of gold and silver stocks, the speculative stocks rise many 100s of % points more than the quality stocks do but both decline about the same. Just goes to show, go with the speculative stocks but not with buy and hold strategy.
The Merv’s Daily Uranium Index declined on Friday by 1.69 points or 1.28% (the average stock lost 2.34%). There were 13 winners, 30 losers and 7 stocks lost in the shuffle. Cameco gained 0.6% on the day, Denison and Extract got lost in the shuffle, Paladin gained 3.5% and Uranium One lost 3.3%. The best daily winner was Forsys with a gain of 11.8% while the loser of the day was Uranium Resources with a loss of 12.8%. Market Vectors Uranium + Nuclear Energy ETF lost 1.8% while Global X Uranium ETF lost 2.27%.
For the full week the Merv’s Weekly Uranium Index declined 316.76 points or 7.34% while the Daily Index declined 4.25%. There were 9 weekly winners, 41 losers and no stocks lost in the shuffle. Cameco gained 1.3%, Denison lost 5.9%, Extract lost 18.5%, Paladin lost 17.4% and Uranium One lost 6.3%. The best weekly performer was Bannerman with a gain of 17.3% while the loser of the week was Wealth Minerals with a loss of 27.3%. Market Vectors Uranium + Nuclear Energy ETF lost 0.6% while Global X Uranium ETF lost 6.0%.
As you can guess nothing has changed from the long term perspective. All indicators are negative and therefore the long term rating remains BEARISH at the Friday close.
Everything is negative on the intermediate term so no need to go through the full exercise. The only thing to note is the momentum indicator. Although both the Index and volume indicator have moved into new lows during the week the intermediate term momentum indicator, although negative, is holding slightly above its early Aug lows for a slight possible positive divergence. We’ll take any encouraging sign we can get. Still, the intermediate term rating remains BEARISH at the Friday close. This bear is confirmed by the short term moving average line remaining below the intermediate term line.
Having copped out on the details for the other time periods I guess I should go through the routine for the short term.
Trend: Although the trend remains to the down side the Daily Indexdoes seem to be making a box pattern with a resistance at the 140 level and support at the 127 level. The action so far is limited so we’ll just have to wait and see how this develops. In the mean time the Daily Index remains below its negative sloping moving average line.
Strength: The short term momentum indicator remains in its negative zone and very slightly below its negative trigger line. As with the intermediate term indicator the momentum indicator here remains slightly above its level from Aug for a developing positive divergence.
Volume: The daily volume action remains low as one might expect during a price decline. This is normal and not giving us amy particular message.
For the short term the rating remains BEARISH at the Friday close. This is confirmed by the very short term moving average line remaining below the short term line.
At the Friday close there was no indication of a rebound ahead but I’ll go with the lateral trend as the trend of least resistance. This goes with the assumption that we are developing a box pattern.