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Charts in brief: 19 Mar 10.

Saturday, March 20, 2010

AIMS AMP Capital Industrial REIT: This is more a buy because of the strong fundamentals but it's interesting to see how the price has not been able to move beyond 21.5c this week.  The price is basically being resisted by the flat 50dMA at 21.5c.  The rising 20dMA is currently at 21c and it looks like it is on course to do a golden cross with the 50dMA.  Nice. This might take another couple of weeks.  This counter is still basing and the top of the base formation is at 23c.

China Hongxing: A sell signal is seen on the MACD today, the first in almost two weeks.   The descending 20dMA nears 15c next week and this might pressure the price to move lower.  Please see: China Hongxing: Downside target?

FSL Trust: It had a nice run up recently but the price action has detached from the upper limits of the Bollinger bands. Is this a sign that price will correct downwards? If we observe how the price action has been affected by the rising 20dMA recently, we would notice that the 20dMA was pushing up the price, forming steps in the process. So, FSL Trust has been doing a correction using time instead of a correction in price. Could it continue its winning streak? The technicals point to the negative.

The MFI has been in decline in the last few sessions, suggesting that the buying momentum is fizzling out.  The MACD's rise is also less vigorous now and the distance with the signal line has narrowed, increasing the chances of a bearish crossover.  The 200dMA has also flattened, together with the 50d and 100d MAs.  Being trapped in a sideways trading range might a more probable near term development.  Support is seen at 60c thereabouts, the confluence of the 50d and 100d MAs.

Golden Agriculture:  MACD seems poised to make a bearish crossover with the signal line.  Price action formed a doji today, signalling indecision.  Someone said to me that the price refuses to fall to the supports I have identified.  Well, we could consider a hedge and buy a bid above initial support which means buying at 56c.  Hedging has always worked for me.  All MAs are still uptrending and I believe that buying at supports is still the way to go.

Healthway Medical:  Similarly here, the MACD seems poised to make a bearish crossover with the signal line.  Although the MFI has been forming lower highs and lower lows, the malaise has been accompanied by decreasing volume.  So, there is no heavy selling. 

Rising 20d and 50d MAs are at 16.5c and 16c respectively.  It remains to be seen if the price action will respond to these two MAs or will it respond more to the 100dMA like what happened in mid-February.  Remember that low volume does not mean that price cannot drift lower.  This is quite evident in the price decline which happened from 26 Jan to 12 Feb on declining volumes.  The 100dMA is currently at 14c.

Saizen REIT:  Saizen REIT closed unchanged at 16.5c, a price it has maintained for the last three sessions.  This is admirable if we notice how the counter has been subjected to some heavy selling which suggests that support is strong.  The uptrend, though gentle, is quite obvious.


la papillion said...

Hi AK,

Will be looking at Aims :) Looks interesting..

I looked at healthway last night. Realised that there is a strong short signal in both weekly and daily charts. It might be playing out in the next few weeks. Go to 0.155? Just sharing my views :)

AK71 said...

Hi LP,

AIMS AMP Capital Industrial REIT has strong fundamentals and is very much undervalued. Very compelling, is it not? ;) There is a lot of interest surrounding A-REIT as it is a leader in industrial properties S-REITs but I believe it is somewhat overvalued although well run. Of course, we have people going after CIT for yield but we know that's myopic. ;)

15.5c target for Healthway Medical? Why not? My personal expectation for Healthway Medical in the short run is a correction in price to at least 16c. I mentioned this in an earlier post:

Fundamentally, Healthway Medical is no longer cheap. It was cheap when I started buying at 10c in mid 2009. Would you believe me if I tell you I still have the very first shares I bought at 10c then? ;) Those are the only ones I have left (in addition to the 7.5c rights shares and 11.61c scrip dividends). I have divested 90% of my investment in the company for capital gains.

Any purchase of Healthway Medical shares for me now would be technically driven and not fundamentally driven.

RK said...

Have vested previously in Aims, would love to add on more but as usual, money is always not enough for investment.. :)

Bought some LMIR at 50.5c yesterday, result of queuing order overnight instead of monitoring the stock "live' - I suppose a disdvantage for those who can't really access online trading during working hours.

AK, apart from REIT stocks, any other stocks that you think is of value at the moment?


la papillion said...

Hi AK,

Thanks for sharing :) Will look more into it :)

It's good that you know when to buy and when to sell too. I've too many regrets about not selling. Hopefully no further regrets!

AK71 said...

Hi RK,

LMIR at 50.5c is fundamentally a good buy. Of course, if we could pay less, it would be better. I don't regret my buys if their numbers show that they are value for money even if their prices dip. Buy with confidence and hold with conviction. :)

The market is ruled by emotions and this is something FA cannot see. We are all probably familiar with these emotions by now: greed and fear. So, there will be times when value is extremely compelling and times when we should not even bother looking. Buy at a price you will not think of selling at and sell at a price you will not think of buying at. Sounds simplistic but you get the gist.

I like the REITs I'm investing in because they offer great value for money even at the current prices. Are there some other stocks which I think offer value? I still like Golden Agriculture. :)

AK71 said...

Hi LP,

I am still learning. After so many years in the market, I am still learning.

FA is the only tool we have to sniff out the good from the bad. However, it tells us the facts. It doesn't tell us anything about market psychology. That's what TA does. Of course, you know that. :)

Having said this, there is no way we could anticipate all the whims of the market. These days, as long as I know I have made the best decisions based on sound FA and TA, I have no regrets. :)

Createwealth8888 said...

It is better to regret with some real profits in the pocket than feeling sorry about the paper profits gone into the air.

AK71 said...

Hi CW,

It is never wrong to take profits. You are right. :)

Hubert wee said...

There is another type of analysis - Sentiment Analysis. Useful as a contrarian indicator.

AK71 said...

Hi Hubert,

I guess the VIX is probably a very useful indicator in such an instance. In an earlier post on 24 Jan, I mentioned: "At the height of the bear market when the VIX was making new highs, when everyone was fearful of buying more shares, that would have been the best time to gradually accumulate shares of good companies."

Of course, another way is to listen to famed contrarian, Marc Faber. ;)

"If you are going to put money to work in stocks both market watchers think Japan is the place to be. After a 20 year bear market and despite high-debt-to-GDP levels, the pair think the market has become too cheap to ignore. Always a contrarian, Faber believes the lack of interest in Japanese stocks makes it one of the most compelling buys in the world. "

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