Merv's Week-End Commentary, 30 Nov 2008

Merv’s Weekly Uranium Review
for week ending 28 November 2008

Merv’s Daily Uranium Index
Market Data for Friday 28 Nov 2008

Open: 112.53
Hugh: 118.21
Low: 109.51
Close: 116.29
Volume: 5067

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

Well, it’s been a pretty good week for a change. The Weekly Index gained over 15% but still has a long way to go to really make a difference. The Daily Index continues to climb and could very soon breach its intermediate term moving average line but here too it is still inside that box that it has been trapped inside for the past two months. One can make the claim that the worst is over and the sky is the limit once again or that we are only in a breathing spell with some knee jerk reactions but not really going anywhere. So, let’s see what the market did during the week and what it is telling us at this point in time.

Friday was a so-so day, probably still an after effect from the U.S. Thanksgiving holiday. The Merv’s Daily Uranium Index gained 2.52 points or 2.22%. There were 28 winners on the day, 14 losers and 8 still going nowhere. We need to get those going nowhere over into the winner’s circle. As for the five largest stocks, Cameco closed the day on the up side with a gain of 2.3% while Debnison was one of those going nowhere. Paladin gained 4.1%, Uranium One gained 15.2% and USEC gained 4.1%. The best winner on the day was Freewest with a gain of 16.7% while the loser of the day was again a double with Strathmore and Wescan Goldfields both losing 15.8%.

As for the week in total, the Merv’s Weekly Uranium Index closed higher by 288.91 points or 15.34%. Not a bad move but it needs to still go a long way to get the juices flowing. There were 34 weekly winners, 14 losers and 2 going nowhere. Of the five largest stocks, Cameco gained 32.7%, Denison lost 17.9%, Paladin gained 21.4%, Uranium One gained 48.3% and USEC gained 27.5%. The best winner on the week was Trigon Uranium with a gain of 181.8% while the worst loser was Nuinsco Resources with a loss of 22.2%.

The weekly gain was quite good for the Indices but they still need much more before the long term rating can change. For now the Weekly Index remains below its negative sloping moving average line and the momentum remains in its negative zone although the momentum is starting to perk up and is above its positive trigger line. It’s a start. The rating, however, remains BEARISH.

On the intermediate term, although the Daily Index is still trapped inside that box the moving average has been closing in on the Index and it would not be a surprise if the Index finally crossed above the average line this week. In the mean time the Index remains below its moving average line and the line continues to slope downward. The momentum indicator continues to move ever higher towards its neutral line but still has some way to go. It is above its level from the past few months and above its positive trigger line. Although still in the negative zone the momentum indicator is projecting on going internal strength in the actions of the Index. The volume indicator is still a weak link but it has moved above its trigger line. The trigger, however, remains pointing downward. All in all, the intermediate term rating remains BEARISH but could start improving momentarily.

On the short term everything is positive. The Index is above its positive moving average line and the momentum is now in its positive zone and above its positive trigger line. As for the short term volume action, that is somewhat screwed up by the Thanksgiving holiday in the U.S. so we’ll need a few days of action before reading the volume. For now the short term remains BULLISH.

As for the immediate direction of least resistance, that would still be to the up side. The only cautionary feature is the Stochastic Oscillator which has entered its overbought zone. Should it reverse and drop below the overbought line we then might see a change in immediate direction but for now it’s still to the up side.

With the uranium stocks starting to look better and better (not good, just better) I am hoping to show a few stocks that are in their bottoming process and ready for a recovery. I hope to start showing a few stocks this coming week but due to other workload I’m not yet sure when I will be able to do it. Watch during Tuesday or Wednesday in this space.