Merv’s Weekly Uranium Review
for week ending 07 November 2008
Merv’s Daily Uranium Index
Market Data for Friday 07 Nov 2008
Open: 119.26
Hugh: 123.25
Low: 113.72
Close: 117.54
Volume: 4319
Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.
With two weeks of a positive market you would think that the stocks would start showing their colors. Unfortunately, the overall ratings for the Index component stocks is still very much in the dumper with 75% still bearish on the intermediate term and 90% still bearish on the long term. Only the short term has shown any life, as one would expect as that is where we should see life first. During my travels I still have not gotten the hang of being able to post commentaries from my wife’s laptop. I got my own this week so I hope to be able to do what I want with it and have it working for whenever my next trip will be. During the week the Daily Index got pretty close to breaking out of that box but, darn it, it just couldn’t get up enough steam. Must be that Obama effect. So, we’re still in the box.
Friday was a very blah day. The Merv’s Daily Uranium Index closed lower but by only 0.20 points or 0.17%. There were 21 daily winners, 19 losers and 10 going nowhere. I’m not sure when the last time it was that we had so many stocks going nowhere. Of the five largest stocks by market value, Cameco lost 4.6%, Denison lost 5.3%, Paladin gained 3.7%, Uranium One lost 2.0% and USEC gained 6.0%. The best daily winner was Powertech Uranium with a gain of 32.1% while the worst daily loser was Nuinsco Resources with a loss of 11.8%.
For the second week in a row the Merv’s Weekly Uranium Index was on the up side. It closed the week ahead by 129.72 points or 5.39%. Not much as far as a week is concerned but still on the up side. There were 27 weekly winners, 19 weekly losers and 4 going nowhere. As for those five largest stocks, Cameco lost 4.7% on the week, Denison lost 7.2%, Paladin gained 2.6%, Uranium One gained 43.1% and USEC lost 1.9%. The best weekly gainer was First Uranium with a gain of 106.4% while the worst weekly loser was Western Uranium with a weekly loss of 23.5%.
Looking at the long term indicators we are still a long way from any kind of trend reversal. The Weekly Index remains far below the long term moving average line and the line continues to plunge downwards. The momentum indicator remains in its negative zone but it has now moved above its oversold line and above its trigger line. It may be starting to show some underlying strength in the Index but is still pretty early in the game. For now the long term rating must remain BEARISH.
The intermediate term is not much better. The Daily Index remains below its negatively sloping moving average line. The momentum indicator remains in its negative zone, but is still above its positive sloping trigger line for some encouragement. The volume indicator has once more started to turn lower but is still above its trigger line although the trigger is still sloping downward. Both the volume and momentum indicators are showing greater strength than the Index as they both are above their levels reached during this “box” period. However, still the only rating I can give the intermediate term at this time is a BEARISH rating.
The short term is, of course, the more positive one after some days on the up side. The Index remains above its positive sloping short term moving average line despite three days of Index down side action. The momentum indicator had moved into its positive zone during the week but has once more moved below its neutral line. It has also dropped below its trigger line although the trigger remains in an upward slope. Although the daily volume is not all that impressive the 50 day average of the daily volume has been on the rise for some months now and continues in an upward trajectory. The very short term moving average line had crossed above the short term line the previous week and is still above the short term line, although it has turned downward lately. All in all, the short term rating is still considered as BULLISH.
As for the immediate direction of least resistance, the immediate trend seems to be towards the down side. The aggressive Stochastic Oscillator has already moved below its neutral line into its negative zone. The direction of least resistance appears to be downward for now.
Over the past couple of weeks we have had some super winners in the component stocks. However, a few days on the up side does not make a turn around. That is still some distance away. I see more lateral movement in the Index and most stocks before any real trend reversal takes hold. Too many speculators become gamblers at a time like this. That’s okay as long as one understand they are gambling and not speculating or investing. Once the indicators tell us we are in a new bull market there will be plenty of time for market gains. Yes, you might miss the early gains but then maybe we are not into a new bull but only a bear market bounce. Then the early gamblers will understand the risk they took.
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