Merv's Week-End Commentary, 16 Nov 2008

Merv’s Weekly Uranium Review
for week ending 14 November 2008

Merv’s Daily Uranium Index
Market Data for Friday 14 Nov 2008

Open: 108.72
Hugh: 113.55
Low: 103.59
Close: 108.02
Volume: 4295

Note that the volume is an average volume of round lot sales for the 50 component stocks. For total volume, multiply by 5000.

Another week with the market moving lower. Despite a 13% drop in the Weekly Index we are not yet at new lows. Maybe this week. Otherwise we might be in a bottoming process if the Daily Index is anything to go by. The Daily Index remains in its box that it’s been in for well over a month now. How much longer it can remain in the box is unknown but I would be willing to suggest that this week we will see it trade outside of the box. Whether above or below the box is a different story. The short term indicators should give us a better idea if it is going in one or the other direction.

The Merv’s Daily Uranium Index closed lower by 2.87 points or 2.58. There were 19 winners, 23 losers and 8 going nowhere. Those figures sound closer to a neutral day than a down one. Looking at the five largest stocks one can see that it was really a down day. Cameco lost 6.5%, Denison lost 14.6%, Paladin lost 5.1%, Uranium One lost 2.7% and USEC lost 7.5%. The best performer on Friday was JNR Resoutces with a gain of 18.4% while the worst performer was Trigon Uranium with a loss of 27.8%.

As for the week in general, the Merv’s Weekly Uranium Index closed lower by 328.98 points or 12.97%. There were only 5 weekly winners, 43 weekly losers and 2 unchanged. For the five largest stocks, Cameco lost 7.0% on the week, Denison lost 0.7%, Paladin lost 3.6%, Uranium One lost 24.7% and USEC lost 8.4%. The best weekly performer was East Asia Minerals with a gain of 29.0% while the worst weekly performer was Wescan Goldfields with a loss of 35.7%.

Things change very slowly in the long term. It will still be some time before the long term rating starts to improve. The Weekly Index remains below its negative moving average line and the momentum indicator remains in its negative zone. The long term rating remains BEARISH as it will for some weeks ahead.

On the intermediate term things don’t change that fast either but here it is getting closer to some ratings improvement, not yet but getting close. The Index is below its negative sloping moving average line but with the Index moving sideways while the moving average is heading lower the two are getting closer and closer to each other. The momentum indicator is still in its negative zone and has moved just below its positive sloping trigger line. It is still above the up trend line for an extra positive momentum direction indication. The volume indicator is eking out a later trend but remains below its negative trigger line. All in all the intermediate term must still be rated as BEARISH.

Although the Index remains in its box, where it’s been for well over a month now, its short term direction changes from week to week. The Index is presently below its negative short term moving average line and the momentum indicator remains in its negative zone below its negative trigger line. The very short term moving average line moved below the short term line a few days ago and remains there for confirmation of a negative rating. The short term rating remains BEARISH.

As for the immediate direction of least resistance, that looks to be more in a lateral direction than up or down. It might take another day to give a better feel for the immediate direction.

I guess it goes without saying that the best option for uranium stock investors or speculators is to continue on the side lines and wait for better confirmation of trend.