Charts in brief: 14 April 10.

A most sterling performance by the STI today as it surged 48.14 pts to end the session at 3,019.74 on heavy volume. People vested in NOL, DBS, UOB and SembCorp, just to name a few, would have made quite a bit of money.

Singapore shares end near 2-year high on surge in 1Q GDP
Wednesday, 14 April 2010

© 2010 - The Edge Singapore

CapitaMalls Asia:  Despite an impressive 1Q 2010 report, its share price barely moved and closed up 1c at $2.30 as it went XD.  Consolidation continues.
Earnings before interest and tax (EBIT) were $110.9 million for 1Q 2010, 174% higher than the $40.5 million for 1Q 2009.

CapitaMalls Asia records 1Q net earnings of $97m
Wednesday, 14 April 2010

© 2010 - The Edge Singapore

NOL: An impressive white candle day as price shot past the recent high of $2.24 to close at $2.30 after touching a high of $2.34.  We have a buy signal on the MACD.  OBV and MFI have both turned up. With such strong momentum, it is likely to power ahead.  Closing above $2.30 convincingly would give an eventual target of $2.60.

Golden Agriculture:  Another higher low formed on the MFI. Price action formed an inverted white hammer, another reversal signal.  Signals continue to be mixed for Golden Agriculture.  Will the improving buying momentum push the price higher?  Initial support has been established at 60c.  Channel resistance is at 64.5c.

Courage Marine: OBV turned up sharply as volume increased significantly.  Price closed up 0.5c at 22.5c, forming a long legged doji, a reversal signal, as it touched 23c, the previous high.  If the reversal signal is valid, price should find initial support at 21c.  If the chart pattern plays out (neckline at 21.5c), we should see gap resistance at 23.5c taken out and the chart pattern resistance at 25.5c tested with a possibility of a push to the eventual target of 27c.  Could we be seeing a beautiful symmetry in the making?

SPH: Volume expanded as price touched a high of $3.99, just 1c shy of the target of $4.00.  MFI has pushed deeper into overbought territory and OBV has turned up sharply.  Forming a white spinning top today as price closed at $3.97, will it push higher tomorrow?  $4.00 remains the resistance to watch.  If this is taken out, the next target is $4.20.  A retracement would find initial support at $3.84.

AIMS AMP Capital Industrial REIT: Buy signal seen on the MACD.  Price touched a high of 23c before closing at 22c on much higher volume. OBV turned up.  MFI has formed a higher low.  22c is still the resistance to watch but if price closes decisively above 22c in the near future, it would be resistance turned support.  23c is the immediate target.  Immediate support is at 21.5c.

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Charts in brief: 13 April 10.

Charts in brief: 13 April 10.

Golden Agriculture: A black spinning top.  This is the seventh reversal signal in a row and seeing how price action has detached from the upper limits of the Bollinger band, a retracement to supports is probable: 20dMA is at 58c and 50dMA is at 56c.  MFI formed a higher low but failed to form a higher high today.  The OBV shows a lack of strength in accumulation.  Of course, as usual, an upward movement in price with high volume would negate all bearish signals.  This does not look likely.

Saizen REIT: Some profit taking happening today.  17c is initial support.  If this goes, a much stronger support is at 16.5c.
Notice of a Director's (including a director who is a substantial shareholder) Interest and Change in Interest: 12-04-2010, Starich purchased 1,000,000 Warrants on the open market.  Mr Arnold Ip Tin Chee is one of the beneficiaries of a trust which directly own Starich. Hence, Mr Ip is deemed to be interested in the 1,000,000 warrants held by Kim Eng Securities Pte Ltd in favour of Starich.

Healthway Medical:  The counter traded at one price only today, 16.5c.  The Bollinger bands are squeezing, it seems, and this usually means an increased volatility in price action is not far off.  16c remains a critical support to watch.  On the face of it, things are not looking good for this counter.

SPH: A long legged doji confirmed the black candle sell signal from the previous session.  Sell signal confirmed on the MACD as well.  Price has detached from the upper limits of the Bollinger bands.  Support is at $3.84. 
SPH has declared an interim dividend of 7 cents per share.

SPH reports 30% rise in 2Q net profit to $113m
Tuesday, 13 April 2010

© 2010 - The Edge Singapore

Courage Marine: Although on signifcantly reduced volume, we have another black candle today.  With MFI in the overbought region and with OBV turning down, the probability is higher for the counter to retrace to support.  I see initial support at 21c.

AusGroup: In my last TA, I said "Price gapped up only to form a white inverted hammer which seems to suggest that fatigue is setting in. MFI has entered overbought territory. A perfect time to take some profit off the table? I think so." A big black candle day today as price closed lower at 66.5c.  However, of note is the much lower volume on this pullback. The selldown has been mild.  Any further selldown would find initial support at 63.5c

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Charts in brief:12 April 10.

Charts in brief: 12 April 10.

CapitaMalls Asia:  No follow through on what had seemed like a promising up day in the previous session as a wickless black candle was formed today.  It is reasonable to assume from today's action that this counter is trapped in a narrow range between $2.33 and $2.28.  When everyone finally tires of looking at the charts, this counter might just surprise on the upside.

Golden Agriculture:  A long legged doji.  This is a possible reversal signal as price does not seem able to break resistance at 62.5c.  However, the MFI has formed a higher low and OBV continues to rise.  Golden Agriculture might just try to push higher.  Channel resistance is at 64.5c this week.

Saizen REIT: Initial resistance remains at 17.5c. Volumes on down days have been relatively lower and this suggests a strong underlying support.  A retest of 18c is still very likely.  The descending 100wMA is also at 18c and this is likely to be a strong resistance.

Healthway Medical:  Today's price action dashed the hopes of stale bulls.  The counter's downward bias is re-asserting itself. Critical support remains at 16c.

SPH: Sell signal seen on the MACD.  Big black candle day as price closed at $3.94.  MFI is in overbought territory.  A pullback should find initial support at $3.84.

Courage Marine:  A premature attempt to move higher, it seems.  Price ended unchanged. Any retreat in price should find support at 21c.  I would accumulate on weakness as improving fundamentals make this counter more promising over the next few months.

AusGroup: Closed at 67.5c resistance level.  Reached a high of 69c. Next resistance is at 70c.  Price gapped up only to form a white inverted hammer which seems to suggest that fatigue is setting in. MFI has entered overbought territory. A perfect time to take some profit off the table? I think so.

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Charts in brief: 9 April 10.

Two great minds on Greece and gold.

I found these clips of recent separate interviews with Marc Faber and Jim Rogers as they shared their views on Greece and gold.  Make good sense, as usual.

5 March 2010
Marc Faber on CNBC - Greece and gold.



26 March 2010
Jim Rogers on CNBC - Greece and gold.





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Gold as an insurance against inflation.
Gold or silver.
Real value of gold.

Charts in brief: 9 April 10.

CapitaMalls Asia: The reversal signal was confirmed today on moderately higher volume as a white candle was formed.  Significantly, price closed above resistance provided by the 20dMA for the first time since 23 March.  The MACD has made contact with the signal line and looks set for a bullish crossover.  Stochastics has formed a higher low as it emerged from the oversold region.  A retest of $2.41 is most likely in the event of a continuing upmove in price.

Golden Agriculture:  Mixed signals seen.  Sell signal confirmed on the MACD on a white candle day as price closed higher at 61c, forming a white spinning top in the process.  The MFI has formed a higher low but note that volume is lower today, an up day, compared to the last two days which were down days.  In TA, we work on probabilities based on the weight of the evidence. This is one of those occasions where I cannot tell if the chances are higher for further upside or a correction downwards.

Saizen REIT: After a short bout of profit taking yesterday, Saizen REIT formed a dragonfly doji today on higher volume as price closed at 17.5c.  MFI continues rising as the sell signal seen on the MACD yesterday was negated.

Healthway Medical: Price broke resistance today and touched a high of 17.5c before closing at 17c, the resistance provided by the declining 20dMA.  Volume expanded and it seems that the MACD might do a bullish crossover with the signal line.  MFI has formed a higher low, suggesting a return of buying momentum. OBV has turned up.  All these are providing hopeful signals to people who remain bullish on Healthway Medical in the short run.  Another chance to sell at 18.5c, perhaps?

SPH: Another white candle day for SPH as it closed at $3.97, just three cents short of the target I have for it at $4.00.  The MACD is tearing away upwards from the signal line.  Very bullish. OBV is rising steeply, suggesting ongoing accumulation.  The MFI has moved into overbought territory but the momentum suggests that $4.00 is almost a foregone conclusion.  After, $4.00?  I see $4.20 as the next resistance.

Courage Marine:  The price closed at 22.5c today, a high achieved on 29 March.  A white candle day on the back of increased volume is reassuring for bulls. OBV has turned up and the MACD is moving higher up away from the signal line.  The technicals suggest further upside and my eventual target remains at 27c, the high achieved on 28 Sep 09.  Gap resistance at 23.5c will have to be overcome first in such an instance.

AusGroup: In my last TA, I said that "the MFI has formed a higher low. This suggests that buying momentum is still strong. OBV suggests that there is no distribution yet. AusGroup might try to push higher again but things are looking dicey".  AusGroup closed at 65.5c today and looks like it might push higher.  Congratulations to those vested.


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Charts in brief: 8 April 10.

Dry bulk carriers: Jason shares.

A reader, Jason, has provided, in my opinion, a wealth of information on dry bulk carriers and what we should be concerned about in the next few years.  I would like to highlight Jason's comments here in a proper post:

"...there are monthly publications that cover dry bulk extensively. You can try shipping.capitallink.com - links to lots of shipping information, ship indexes and its weekly newsletter has got plenty of information also on dry bulk shipping.......



"Just so i give you an idea of what dry bulk shipping is all about category of ships:

"VLOCs (very large ore carriers) - primarily used to carry iron ore, Vale will become the owner of the largest VLOC fleet in the world.


"Purpose is to get economies of scales to move iron ore from Brazil to China, compete against BHP/Rio who are much nearer vis-a-vis Australia.


"Capesizes: Moving mostly the hard dry bulk cargoes viz iron ore + coal (usually 120,000 dwt to 220,000 dwt range)


"Panamax: moves coal/iron ore/grains (70,000 dwt to 120,000 dwt)


"Handysizes/Handymax/Supramax: moves everything under the sun - offers the greatest flexibility due to their size, can stop at any port of call to unload (5,000dwt to 69,000dwt)


"To gauge charter rates, you have to look at their respective indexes : BCI (baltic capesize index), BPI (panamax index), BHI (handy index)......charter rates for panamaxes have overtaken capesizes! This was driven by the grains markets - 5 biggest producers being USA, South America (Argentina/brazil), Russia, Europe, Australia.


"Right now, fleets are looking to Asia for business - China (iron ore + coal), India (coal), Japan (iron ore, coal), Korea (coal, iron ore) why? Cos Asia houses some of the biggest steel producers in the world! China - Baosteel/Shagang/many more. India - Arcelor Mittal. Japan - Nippon Steel. Korea - POSCO


"Right now,USA gets its iron ore from backyard (domestic + Canada). Europe still imports from Australia/Brazil but not much cos their economy is still in the toilet for now.


"Coal is very much part of the steel production (used in the blast furnaces) and power plants, of which India especially is lacking in the latter while China needs the former! Why the boom in China? Biggest car mkt in the world (13.6m cars in 2009), property boom, infrastructure spending from new stimulus package in 2010.


"So ships will be everywhere but mostly with an eye for Asia. China is gobbling up every known commodity on earth - copper/aluminium/zinc etc, wheat, cotton....rates keep going cos charterers pay more to get ships out from the far east to Europe/baltic/atlantic.


"So long as Courage Marine can focus its biz on China/Asia/India exclusively, the upside is there. And we all know doing biz in China is all about guan xi......:) Keep that guan xi and you are OK.


"As for the progressive new ships coming on board, the ship owners will suffer the most whilst the charterers will be laughing to the bank - i can pick and choose my shipper!"

In my reply, I suggested that the demand for dry bulk carriers is likely to remain strong in Asia but as Jason pertinently pointed out, the world of dry bulk carriers would be focusing on Asia to pick up the excess capacity and with new ships joining the fray in the coming years, a lid might be put on earnings with increased competition. 

Based on my analysis of Courage Marine's numbers, with their strict cost management and very low gearing, I believe that they will be able to do relatively well.  If revenue reduces and costs stay low, we can weather storms.  If revenue reduces and costs are high, we are most likely on a sinking ship.

Courage Marine is also very focused in offering their services in the Greater China region where growth is the strongest in the world.  Since 2001, Courage Marine has built a good name for itself in this region.  It is small but nimble. As long as Asia continues to do well, Courage Marine would be a key beneficiary.

A China Bubble? People Have Been Saying That Forever
Posted Apr 08, 2010 09:46am EDT by Henry Blodget



Related post:
Courage Marine: Riding the waves of recovery.

Charts in brief: 8 April 10.

CapitaMalls Asia: A doji, another reversal signal, was formed today with price closing at $2.29 with the lowest volume in weeks.  A reversal signal again?  Dare I hope?

Golden Agriculture:  Yesterday, I said that with "both the MFI and OBV turning down, which suggest reduced buying momentum and the presence of some distribution, the black spinning top possibly signals a reversal".  The counter went to touch a low of 59c today before closing at 60c.  MFI and OBV continue to decline and we see a sell signal on the MACD. If we look at the chart, the 20dMA has not been very reliable as a support in past instances.  I would look to the 50dMA instead this time for a strong support.  It is currently at 55c.

Saizen REIT: A black candle day as price closed at 17c on lower volume.  Likely short term profit taking.  It is quite clear from the chart that 17c was a resistance level since 22 Jan 10.  We need confirmation in the next few sessions to see if 17c is resistance turned support.  If it is, chances are that price action would be forming a new base at 17c before moving higher.  Such is the slow motion rise of Saizen REIT but the longer term MAs are rising and there is no question that the longer term uptrend is intact.

Healthway Medical: Another gravestone doji as price closed unchanged at 16.5c.  This is somewhat impressive but with the 20dMA and 50dMA both completing their downturns, a move downwards to critical support at 16c looks most likely in the near term.  The MFI has also formed a lower high and this suggests that buying momentum is definitely weakening.

SPH: Reversal signal was negated as SPH formed a nice and long wickless white candle, closing at $3.94.  OBV is rising strongly as accumulation carries on.  MFI has flattened and is not overbought.  A push towards $4.00 is now looking very likely.

AusGroup: Touched a high of 64c on respectable volume but closed at 62c.  This candlestick is very bearish.  63c remains the immediate resistance.  On top of this, the MACD has a sell signal.  However, the MFI has formed a higher low.  This suggests that buying momentum is still strong.  OBV suggests that there is no distribution yet.  AusGroup might try to push higher again but things are looking dicey.

Oceanus: Sell signal confirmed today on the MACD.  Price closed at 36.5c which is support provided by the 100dMA.  We will need confirmation whether this is the new support level.  If it breaks, next support is at 35c.

Genting SP: Volume shrank as price closed at 89.5c.  It would be interesting to see if it continues basing at this level or moves to test the recent low of 83.5c in time.  With MFI and Stochastics near oversold regions, I do not expect any drastic downward movement in price if news stay benign.

China Hongxing: No follow through from yesterday as price formed a black candle, resisted by the declining 50dMA.  Immediate support remains at 15c.  Fundamentally, the company has many challenges and made some bad decisions last year.  The slightest positive newsflow in such a situation might have a strong positive impact on the share price.

Some readers asked if I am vested in all the counters I cover.  I'm not.  I am not vested in the last four counters here, for example.  I do the TA for these for various other reasons.  If you happen to be vested in these counters, I hope the TA is useful to you.

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Charts in brief: 7 April 2010.