Merv's Weekly Commentary 06 Nov 2011

Merv’s Weekly Uranium Review

for week ending 04 November 2011

Merv’s Daily Uranium Index

Market Data for Friday 04 Nov 2011

Open: 149.34

High: 151.32

Low: 146.31

Close: 149.07

Volume: 2636

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.

Back at last, hopefully for some time.

Before starting the weekly commentary and analysis I should say that I hope to totally review the Index component stocks over the next week or two. There are a few stocks that might need replacement. I am open for suggestions of stocks to consider adding or replacing. Global X Uranium ETF may be an addition as I now have enough historical trading information to include it in the Table. I don’t have the time to be constantly monitoring all of these stocks so any help or advice would be appreciated.

One stock that is giving me concern is one of the largest uranium stocks, Extract Resources. It’s primary market is on the Australian exchange where it is relatively active but here on the Toronto exchange it doesn’t trade very often. This is not good for the Index calculation. I am looking at plugging in the daily trading information from the Australian trading by hand but this is time consuming, which is limited to start. I haven’t decided what I will do yet but will let you know after I have decided.

The uranium stocks, as represented by the Merv’s Indices, have not done much since I last posted. It’s that kind of a market, nothing too exciting. Of course there are always a few stocks that out perform the Indices. Hopefully those are the ones most of you are into. Let’s go right into the normal routine.

The Merv’s Daily Uranium Index closed on Friday with a loss of 0.69 points or 0.46%. There were 18 winners, 21 losers and 11 stocks that don’t seem to know what to do. Cameco lost 0.3%, Denison and Extract didn’t know what to do, Paladin lost 0.7% and Uranium One lost 1.7%. The best winner of the day was Continental Precious Minerals with a daily gain of 12.1% while the loser of the day was Bannerman with a loss of 8.5%. Market Vectors Uranium + Nuclear Energy ETF lost 1.5% while Global X Uranium ETF lost 1.6%.

For the full week the Merv’s Weekly Uranium Index lost 86.6 points or 1.7% while the Daily Index lost 3.5%. There were 15 weekly winners, 29 losers and 6 not knowing what to do. Cameco lost 3.1% on the week, Denison lost 4.3%, Extract lost 0.5%, Paladin lost 13.1% and Uranium One lost 6.6%. The best weekly winner was Formation Metals with a weekly gain of 21.4% while the loser of the week was Bannerman with a weekly loss of 16.9%. Market Vectors Uranium + Nuclear Energy ETF lost 6.0% while Global X Uranium ETF lost 6.1%.

It’s been three weeks since the last market review so let’s get right to it and see where we are at the Friday close.

LONG TERM

Trend: Both the Weekly and Daily Indices remain below their respective long term moving average lines and the lines remain sloping downward.

Strength: Both momentum indicators are perking up and are above their respective long term trigger lines but both indicators still remain in their negative zones.

Volume: The long term volume indicator has been moving higher over the past few weeks but no great shakes. It remains just below its negative sloping trigger line.

At the Friday close the long term rating remains BEARISH.

INTERMEDIATE TERM

Trend: Two weeks ago the Daily Index crossed above its intermediate term moving average line and a few days later the line turned to the up side. The Index is still above the line and the line continues to point upwards.

Strength: The intermediate term momentum crossed above its trigger line a month back and has been trending ever higher ever since with the trigger line following. However, the indicator still remains slightly in its negative zone.

Volume: Although the volume indicator is not showing much strength it has crossed above its trigger line and the trigger has turned to the up side.

At the Friday close the intermediate term rating is BULLISH. This is confirmed by the short term moving average line having crossed above the intermediate term line.

SHORT TERM

Trend: The Daily Index has been above its short term moving average line for a month now but did cross below the line for one day this past week. Although closing above the moving average line on Friday the Index is very close to the line and could drop below the line quickly. The line is, however, still in an upward slope.

Strength: The short term momentum indicator had moved into its positive zone several days ago and remains there. However, it has also dropped below its trigger line and the trigger has now turned to the down side.

Volume: The daily volume action has been pretty low and not showing any signs of renewed speculative interest in uranium stocks in general.

At the Friday close the short term rating is BULLISH. This is confirmed by the very short term moving average line remaining above the short term line. However, the two moving average lines are converging fast and it would not take more than a day or two of negative activity for the very short term line to drop below the short term line.

As for the immediate direction of least resistance that is starting to look more and more like the down side although the Stochastic Oscillator had turned upwards in the past couple of days and may be on to something.