for week ending 14 October 2011
Merv’s Daily Uranium Index
Market Data for Friday 14 Oct 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.
It’s been a good week for uranium stocks, even a great week for some BUT one week does not a new trend make. Although the short term prognosis has improved tremendously the intermediate and long term still have a way to go. I may be a little to cautious at times but I have learned long ago by bad experiences that to jump in just to get in on the bottom floor is not always the best way to go. Wait for the stocks to confirm new trends before jumping in and then you can assume a lot lower risk and still make good profits. Those who jump in at the very slightest bit of good news were probably jumping in in mid-June or early Aug and now still have quite a way to go just to break even from those false moves. Better to be safe than sorry.
The Merv’s Daily Uranium Index closed on Friday with a gain of 3.98 points or 2.82%. There were 30 winners, 11 losers and 9 stinkers. Not a very bullish statistic for a roaring new bull. Cameco closed the day with a gain of 2.0%, Denison gained 3.3%, Extract gained 0.7%, Paladin lost 1.7% and Uranium One gained 6.6%. The best daily winner was USEC with a one day gain of 53.3% (WOW!). The worst daily loser was Crosshair with a loss of 11.1%. Market Vectors Uranium + Nuclear Energy ETF gained 2.9% while Global X Uranium ETF gained 4.7%.
For the full week the Merv’s Weekly Uranium Index gained 10.1% while the Daily Index gained 8.6%. There were 37 weekly winners, 10 losers and 3 stinkers. Cameco gained 7.8% on the week, Denison gained 9.6%, Extract gained 12.2%, Paladin gained 13.0% and Uranium One gained 7.1%. The best weekly winner was USEC with a weekly gain of 68.6% while the loser of the week was Wealth Minerals with a loss of 12.0%. Market Vectors Uranium + Nuclear Energy ETF gained 8.3% while Global X Uranium ETF gained 14.7%.
Trend: Both the Weekly and Daily Indices continue well below their respective negative sloping long term moving average lines.
Strength: The long term momentum indicators for both Indices remain in their negative zones but are moving upward and are now above their positive trigger lines.
Volume: The long term volume indicator is moving upwards but at a very slow pace versus the Index. It has not yet crossed its trigger line which itself is still in a downward slope.
Putting it all together, at the Friday close the long term rating remains BEARISH.
Trend: The Daily Index is still far below its intermediate term moving average line with the moving average line still sloping downward.
Strength: The intermediate term momentum indicator seems to be acting stronger than the Index itself. It is above the level of the August highs even as the Index is still some distance below its heights. However, the indicator is still in its negative zone but nicely above its positive sloping trigger line.
Volume: This is still the weakest of the indicators. Having said that, the indicator has crossed above its intermediate term trigger line by only a minimal amount. The trigger itself is still in a downward slope.
At the Friday close, the intermediate term rating remains BEARISH with the short term moving average line some distance below the intermediate term line for confirmation.
Trend: There’s no getting away from it, the Daily Index short term is most definitely on the up side. The Index is above its positive sloping moving average line. It is, however, getting into a very strong resistance area from the Aug/Sept action. We should expect a halt to the up move at least temporarily very soon.
Strength: The short term momentum indicator has moved into its positive zone and well above its positive sloping trigger line.
Volume: This is still the holdup. The daily volume action has not improved. We need improvement here for the trend to have any chance of longevity.
At the Friday close the short term rating is BULLISH with the very short term moving average line confirming this bull by moving above the short term average line.
As for the immediate direction of least resistance, I’m not sure how good my coin flipping has been but it’s better than many experts. The flip says that for the next few days things are unsure and lateral direction seems to be the thing. To get the lateral direction by the flip, the coin landed in a crack and stood on its edge. If you believe that – wait, where is my Bre-X stock to get rid of.