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Charts in brief: 29 April 10.

Thursday, April 29, 2010

CapitaMalls Asia: On 26 April, I said that "when the MACD starts closing the distance with the signal line, that is when we are closing in on a genuine reversal".  The MACD has flattened today while the signal line continues to fall.  A white hammer is formed today.  This is the third reversal signal in a row. It is also the first day that price action has detached from the lower Bollinger band. Even if a reversal does not happen, this suggests that the downward momentum is weakening.  The stochastics continues to rise within the oversold region while the MFI pushes deeper into the oversold region. Mixed signals are more positive than negative in a downtrend. Immediate resistance are at $2.23 and $2.27.

Golden Agriculture: A bearish candlestick setup today as the black candle travelled half the distance down the previous day's white candle. All momentum oscillators are down.  OBV is also down. Saving grace? Reduced volume. Immediate resistance is now provided by the 20dMA at 60.5c while immediate support is still at 57.5c. Weakness is very much obvious and the counter might move to test supports before moving higher.

Courage Marine: A strong Baltic Dry Index (BDI) might be the reason for a levitation act here plus the fact that the counter is trading CD. The BDI is up almost 4% today at 3,329.  This is a boon to Courage Marine, for sure. Counter closed at 22c today, the support provided by the 20dMA.

Even though I really like the fundamentals and I like this company, the technicals are a tad weak and I would not chase it. Momentum oscillators are down.  The MACD continues to pull downwards away from the signal line. The OBV has turned down for two sessions in a row.

However, for someone who is looking for exposure to the counter, the current price should have limited downside with a cluster of supports at 20.5c to 21.5c. Any entry at this level should be considered a hedge. I won't break the piggy bank.

Genting SP: A dramatic reversal today after spotting five reversal signals in a row: black hammer, black spinning top, doji, white hammer, white hammer.  This is a good example of how a counter might have multiple reversal signals before the reversal is confirmed in the usual way.

Extremely high volume up day as two resistance levels were blown away. Next resistance levels are at 97c and $1.02. Momentum oscillators have all turned up strongly. Chances of a follow through are good. Not vested.

Related post:
Charts in brief: 28 April 10.


sqr said...

Announcement of Disposal of MV Cape Ore

what the hell is going on with this ship?

AK71 said...

Hi Sqr,

You seem to be upset with this development. Hahaha... Well, it is somewhat puzzling but it is possible that they found some major issues with the ship upon taking delivery. I cannot imagine why they would dispose of it so quickly otherwise. Well, it is just a guess on my part.

Courage Marine actually made money from this disposal. So, I don't really have a problem with this.

"The Directors are of the view that the .... disposal would be in the best interests of the Company and the Group as the MV Cape Ore is 29 years old and the proposed disposal price reflects the recent increase in steel prices which has resulted in a corresponding increase in the scrap value of MV Cape Ore. The Company had on 17 March 2010 completed the purchase of MV Cape Ore for a purchase price of US$7,850,000.....the disposal of MV Cape Ore would result in a net gain of not more than US$400,000..."

sqr said...

Hi, AK,

Really fast response from you, thanks.
I do not believe that Courage Marine actually benefit from the deal.
1. there must be substantial cost incurred for a ship transaction, and this simple math calculation is not convincing at all. (a layman point of view)

2. this ship has a DWT of 130,000, which is by far the biggest in Courage's fleet. Even from the naming, we can see the intention and expectation. Analysis even threw out a figure of 30% shipping volume up with addition of this ship.

An unsuccessful acquisition and a covered up announcement. I am really upset.

Btw, I am not holding this counter at the moment.

AK71 said...

Hi Sqr,

Hmm.. I cannot say if it was an unsuccessful acquisition. The ship was successfully acquired. However, there might have been issues with its utilisation. The ship's age was cited as the reason for its demise.

Personally, I guess that the ship might have some age related issues which were not obvious previously. Courage Marine's management is very savvy when it comes to cost management. They probably concluded that it is more economical to scrap the ship than to have it repaired. :)

You are not a shareholder and you are upset. Poor me. ;-p

sqr said...

I am eyeing on this one, and I spent some time reading about it, especially when I saw it from your post. Now the feeling is mixed. I am unsure and I will keep watching.

AK71 said...

Hi Sqr,

I think you are being prudent which is not a bad thing, for sure. It is always good to be absolutely comfortable with a company before buying in. That's the only way one could buy with confidence and hold with conviction, ignoring all the noise in the process. :)

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