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Starhub, CapitaMalls Asia and CitySpring.

Tuesday, November 30, 2010

A reader asked me what's happening to Starhub and another one asked me what's happening to CapitaMalls Asia. The recent price weakness must be spooky for quite a few investors.

Starhub's uptrend is clearly broken. The support at 20dMA broke five sessions ago and closing at $2.63 today on high volume looks ominous as a long black candle was formed. $2.63 is where we find the rising 50dMA. Could we see price bouncing off the 50dMA? We could but there is no clear sign of a reversal. So, if price bounces off the 50dMA, it could be just that: a bounce.


The MFI has been forming lower highs and in a rebound, we could see it testing its downtrend resistance which approximates 50% which itself is a natural resistance.  If the MACD continues to descend towards zero, we could see it crossing into negative territory. We could see price testing the 100dMA as support then. Using Fibo lines as a guage, $2.51 is also where we find the 161.8% Fibo line. It would take a brave person to go long at this point in time. Immediate resistance at $2.72.

CapitaMalls Asia's share price closed below $2.00 once more. A long black candle was formed on high volume as price closed at $1.97. Will this counter test its low of $1.91 touched on 7 May 10? With all the momentum oscillators trending down, it could.


Time to go long? I don't think so. I would let the downtrend run its course and wait for clearer signs of a reversal. Watch out, in the meantime, for signs of stabilisation. See if the candlesticks start moving inwards away from the lower Bollinger.

I fully divested my investment in CitySpring, an investment which I have long regarded as a mistake, in early October. Kim Eng has downgraded the trust to a SELL now: Kim Eng Securities downgrades Cityspring Infrastructure Trust to Sell from Hold, cuts target price to $0.52 from $0.62 on prospect of lower distribution payouts, dilution risks.



Related post:
CapitaMalls Asia: Uptrend broken.
CitySpring Infrastructure Trust: Thoughts on divestment.

12 comments:

Anonymous said...

I am quite interested in CapMall Asia as well...what is your preferred price of entry ?

Nick

AK71 said...

Hi Nick,

The lower the better. Haha.. ;)

At this moment, I am not sure. I will take my cue from the charts. :)

CL said...

how about capitaland? been plunging. :)

Anonymous said...

if you look at starhub, the high dividend payout over the past years is not sustainable....

Paul

Anonymous said...

Thanks AK

SnOOpy168

AK71 said...

Hi CL,

Capitaland is in a downtrend too and with volume expanding today forming a long black candle, things look really weak.

However, if we check the weekly chart, we see that $3.61 is where we find the 100wMA and that's where price closed today. So, we could expect some support and perhaps, even a brief rebound with immediate resistance at $3.80.

In case of a continuing downward movement, the next support is at $3.50. Good luck. :)

AK71 said...

Hi Paul,

Why do you think so? Reading the blogs of momoeagle and Drizzt convinced me that if Starhub stops paying dividends for a few quarters, they could repay their debts in full. What do you think of this?

I have been thinking of investing in Starhub but I do not understand their business model fully. Would appreciate pointers. :)

AK71 said...

Hi SnOOpy168,

No problem. Good luck. :)

Drizzt said...

ah the age old starhub debate.....

Drizzt
Investment Moats.com

AK71 said...

Hi Drizzt,

And so it is. :)

Anonymous said...

Anyone saw today amtek trading first day.already when down below ipo.Recently alot of ipo all went down beldow ipo.what the reason.

TN

AK71 said...

Hi TN,

Price is very often a reflection of market sentiments. It could be overall sentiments or sentiments towards individual counters.

I have avoided IPOs for a long time as it is very hard to gauge how they would fare once they start trading.

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