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Saizen REIT: Buy signal.

Friday, March 5, 2010

For the first time in weeks, we have a buy signal for Saizen REIT in the MACD on the weekly chart as the price closed at 16.5c.  We see how the MACD seems to be pulling away ever so slightly from the signal line.  This is a positive sign.

On the daily chart, the MACD continues to pull away from the signal line further away into positive territory.  20dMA and 50dMA continue to rise in their merged form, providing a strong support.  The Bollinger bands squeezed four sessions ago and are expanding now, marking a departure from lower volatility as price sets off in one direction, which is up, in this case.
The MFI has formed a higher high which marks positive buying momentum.  Using the technical tool, Ichimoku, we see that Saizen REIT's price has emerged from the upper limits of the cloud (the translucent blue area) and this means that it has emerged from resistance and is free to move higher.

It might still be early days but the signs are promising.  We will need confirmation next week on whether Saizen REIT's price will continue its positive movement.  Good luck to fellow unitholders.


Anonymous said...

Hi AK, just some questions regarding the saizen warrant. the exercise price is 0.09 and the conversion ratio is 1-1. Does this mean when the warrant price reaches 0.09, i can start purchasing saizen shares at 0.09 per share? And let say if the warrant price stay below 0.09 past the expiry dates, this means all the warrant I have purchase at 0.075 will be worthless? And lastly, does the movement in price of the shares correlate with the movement in the price of the warrant. It look as though that both seems to be moving independently of each other. Thanks


AK71 said...

Hi Mike,

Ownership of the warrants allows the holder to convert the warrants into Saizen REIT units with all the accompanying benefits, including entitlement to income distributions, anytime before the expiry date. If you hold the warrants until they expire, they become worthless.

So, let's say you bought some warrants at 7.5c, if you want to convert these into Saizen REIT units, you would have to pay an additional 9c (the conversion price). This would mean that your Saizen REIT units would cost you 16.5c in total. For details on how to convert warrants, please contact your broker.

The value of the warrants has a great deal to do with how much Saizen REIT units are being traded for. If Saizen REIT units are trading at 16c, the fair price for the warrants would be 16c - 9c = 7c, for example. of course, it is not always so precise and you might be buying the warrants at a premium sometimes, rarely at a discount.

Good luck. :)

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