Saturday, April 21, 2007

Uranium Index, Week 14

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After a week of regulatory delays, the merger between UrAsia Energy and SXR Uranium finally completed on Friday after market close. I completed my index update last week, so although it was a week early, I actually don't mind, since UUU had a higher weight in the index last week.

My uranium index extended its slide downwards from last week, although it looks like it may have put in the bottom on Friday. But technically, we won't know whether Friday was the bottom or not until we see a test of the 26100 level. As indicated in the above chart, there isn't a specific level of support, but more of an area of support. We'll have to see how this coming week unfolds.

One other thing that I've noticed is that my uranium index is loosely following the short term trend of the TSX Composite index. Market sentiment for the TSX index is unclear right now, although I will say that we are much closer to a short term top than we are to a short term bottom. Regardless, I still think that the uranium index will at least make the roundtrip back up to the ATH's at around 28500. What happens after that is anyone's guess.

One last interesting news item is that UxC announced that it signed an agreement with NYMEX to offer a uranium futures product. This uranium futures contract will start trading in the first week of May 2007. This is certainly an interesting turn of events. No more will we have to wait for the release of uranium prices from UxC each Monday. And we will now get to see just how much hedge fund interest there is in the uranium market. Very interesting times indeed.

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