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LMIR: Up against a wall?

Monday, May 31, 2010

LMIR staged an up day as well but on rather lacklustre volume. Price hit a high of 47c before retreating to close at 46c. 47c is a many times tested support and could be a strong resistance now.  For those who wish to, it is a good price to reduce exposure at. Price could touch a high of 47.5c for this REIT tomorrow and the downtrend would still be intact.

However, the momentum oscillators are encouraging with MFI forming a higher high and the OBV continuing to rise. The MACD looks like it would do a bullish crossover with the signal line in negative territory.  Let's see what tomorrow brings.

My strategy in a downtrend: Sell into strength as price rebounds to test resistance. Buy more when price shows signs of bottoming or when the trend shows signs of reversing. Bearing this in mind, I would queue to sell some at 47.5c, the trendline resistance, tomorrow


Anonymous said...

Hi AK,
I don't understand why you are trading LMIR and AIMS if your aim is passive cash flow. Should we not be buying more as prices go lower and yeild goes higher. The price difference to trade is not that great unlike some other counters, plus the risk of getting our TA wrong and not to mention the trading fees involved.
Should we not be happy with a 10% return in a market like the one we're in?
Thanks AK.

AK71 said...

Hi KL,

I was waiting for someone to ask me this exact question. :)

I am vested in AIMS and LMIR primarily for the passive income generation. However, if I can make more or lose less money in the meantime by applying what I know in TA, I would not hesitate to do it.

My trading in AIMS and LMIR is limited to 25% of my total position in each REIT. So, most of my position (ie 75%) is left untouched. If I get my TA wrong, what I have risked is a small portion of my total investments. ;)

So, understanding that AIMS is rangebound could allow us to trade it and make some extra money (buying at support and selling at resistance) while understanding that LMIR is in a downtrend could allow us to lock in some gains or limit losses as price forms lower highs as we wait to collect more when it bottoms.

I am generally quite happy with a 10% annual return from my investments and in fact, if I do not know TA, I would probably be just adding to my positions as prices decline. It would be quite straightforward. This simple approach no longer satisfies me these days. Have I become a complicated person? Maybe. :-(

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