They chose financial independence over home ownership.

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FSL Trust: A sinking ship?

Tuesday, May 4, 2010

The sell down today is very severe and it is due to revelation that two ships are being returned prematurely.  Their leases were supposed to end in 2014. This would mean the removal of two significant income streams for the trust to the tune of US$20,700 per day per vessel, to be exact.  See announcement here.

At midday, FSL Trust was down almost 10% at 54.5c on extremely high volume. Two groups of people are probably wondering how low it could go.  The first group would be unitholders (if they have not sold by now).  The second group would be people who still want to buy into the trust for some reason.

Looking at the chart at midday, all MAs, short and long term, have turned down.  The MACD is plunging into negative territory and pulling away from the signal line. MFI re-enters the oversold region. Look at the OBV, it has jumped off a cliff!  People are discarding FSL Trust! Unless some re-assurance is received from the management that the trust has some contingency plans, this panic selling is likely to continue for a bit more. 

How low could it go? In such a panic situation, it is hard to say but it could go much lower. However, to be fair, in situations of extreme selling, there is always a chance of a rebound. I will do some charting again this evening and perhaps look at the numbers too.

Related posts:
High yields: Successes, failures and the in betweens.
Charts in brief: 19 Mar 10.


Drizzt said...

shall analyse it. this might be an opportunity.

AK71 said...

Hi Drizzt,

It might be. :)

Aspire said...

Hi AK,

Just to check, how do you keep up-to-date with what's going on in a company?


AK71 said...

Hi K,

It depends partly on how timely the company shares information with us. We have to check for the latest news on SGX's website regularly:

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