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Charts in brief: 3 May 10.

Monday, May 3, 2010

A brand new trading day in a brand new month.  It's May! Are you going to sell in May and go away?

CapitaMalls Asia: Black candle day on reduced volume. Price closed at gap support: $2.16. MFI is still in the oversold region. MACD is still below zero.  Momentum is negative but the distance between the MACD and signal line has narrowed. Reversal is looking dicey, again. See what happens tomorrow.  As usual, I would sell on the way up.  If price continues to decline, look to the next supports and see if they hold.  Would buy on weakness if supports hold as I still like the fundamentals of this counter.

Golden Agriculture: MFI and OBV flattened.  This counter is looking directionless. Having been trading beneath the 20dMA ,which has turned downwards, for four sessions in a row does suggest that a slow drift downwards is probable. 60c is the immediate resistance now.  If the support at 58c is taken out, the next support could be found at 55.5c as provided by the rising 100dMA.

Healthway Medical: Traded the whole day at one price only, 15.5c. The trading volume has been in decline as the price drifted lower.  This is a positive. The rising 100dMA should provide a relatively strong support at 15.5c.  The MFI is in oversold territory and I do not expect the price to crash.

The current price level is good to enter as a hedge for anyone who has been waiting to get in.  However, looking the MACD's behaviour of staying closely to the signal line in a parallel fashion as it goes deeper into negative territory suggests that this malaise might continue for some time. In case of further weakness, support would strengthen with every 0.5c decline in price.

Courage Marine: Price plunged after XD today. I like the fundamentals of the company and I see 20.5c as a strong support provided by the rising 50dMA and I would buy more at that level.  Price might continue to weaken to 20c and I would accumulate if it happens.  If price continues to lower towards 18c which is the price where the counter made a double bottom, I would load up more.  A triple bottom?  Maybe.  So, buy on weakness but I would not break the piggy bank.

Especially, I would like to draw attention to the declining volume as price weakens.  It is a low volume pullback.  This gives me greater confidence in my decision to accumulate on weakness.  The FA is good.  The TA lets us know entry prices which are considered fair.  It doesn't get any better than this for me.

Saizen REIT: Ongoing weakness seen here. 16c might be called upon as the support next and this, in my opinion, would be a strong support as we see three Fibo lines approximate 16c. They are the 138.2%, 150% and 161.8% Fibos. I am in the buy queue at 16c.

MFI is in the oversold region but the down trending OBV suggests some distribution activity.  So, it might be oversold but there are unitholders who are still willing to sell down.  Looking at the numbers, the suggestion is that smaller unitholders are the ones selling.  I do not see any high volume sell downs. For a REIT with almost a billion units currently in the market, a daily trading volume of 1m to 2m units is almost nothing.  If people are willing to sell cheaper, I am willing to buy cheaper.  At 16c, this would be almost a steal at a 60% discount to the last reported NAV!

Related post:
Charts in brief: 30 April 10.


Anonymous said...

what kind of books would you recommend for FA? as compared to TA, it seems hard to find. been reading the intelligent investor. but not really know how to use it except to use the different ratio to gauge.

AK71 said...

Hi ezinvest,

The easiest book for anyone starting on FA, in my opinion, is the one in the box at the top right hand corner of this blog.

The book tells you in a concise manner how Warren Buffet interprets financial statements. It is written by Mary Buffet and David Clark. :)

Anonymous said...

dear AK,

your opening questions . . . which i hv been pondering for weeks. i guess the answer for myself is sell in May but DO NOT go away : ) hahha !!! i think that the happenings in Greece & Goldman Sachs which concidentally spill into May will make us see "blood" !!!

Soldiers (investors) will abandon the field when they see "blood". who knows maybe it will create buying opportunities???

World Cup is coming soon ... do u think market will dip again following history?

i do hv some tiny winny regrets now that i bought a bit too early end of April. sigh, i agree u can't hv the cake & eat it!


AK71 said...

Hi KM,

My sis baked a really nice prune cake today. Coincidence! Yummy. Burp.

May 2009 was OK. People who bought shares then and didn't go away would have gone away laughing. Sorry, couldn't resist the puns. ;)

I am not a soccer fan but I think a large portion of the human race is. I don't know what the World Cup would do to the market. I really don't think Goldman Sachs' case has any financial consequences which would shake the world. It's mostly a legal issue. As for Greece, well, they are getting their bailout now. :)

Fundamentally, the fact that the world economy is on the mend is obvious. As long as we can mend things by printing money, I think we are not done recovering yet. There is some way to go. However, the markets have gone up so much since March 09. It needs to digest its gains. So, a correction is good and should take place.

I bought some shares in April too: China Hongxing - cut and lost some money. Courage Marine - sold some and made some money. CMA - holding and losing some money.

I would make use of this correction to collect more shares/units in counters I am tracking. Will look out for opportunities. That's me. :)

Anonymous said...

Hi Ak,
You mentioned that you would accumulate more Saizen if it drops to 0.16. During the correction, will the price move even lower than that?

CapitaMall Asia has dropped to 2.10 today. Do you think it will break S$2.00?

Tks always,

AK71 said...

Hi Naomi,

Saizen REIT, in one of my earlier posts, I said I believe that 16.5c is the new floor. However, Mr. Market does not care for personal believes. ;)

If 16.5c does break, 16c is the new support and the technicals suggest that this is a strong support. As the uptrend is still intact, buying at supports is the way to go. Would it go lower? 15.5c? Why not? What would I do then? Buy more. :)

Rgarding CapitaMalls Asia, I cannot say if it would break $2.10 which is another support level. If it does break, the next support is at $2.07.

The downtrend is clear. So, I would wait to see that new supports hold before adding. Will look at the chart this evening.

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