STI: 2400 is still a real possibility.

It has been a while since I looked at the STI. Looking at it again today did not reveal anything alarming. Well, not alarming as in I did not see anything I did not expect to see.  The picture is still more negative than positive.

The MACD has been closing in on the signal line and is now set to do a bearish crossover. MFI, a measure of demand, has been in decline. RSI has also been in decline which suggests that the attempt to continue the longer term uptrend is sputtering.

Using the high of 15 April and the low of 25 May, if we draw some Fibo lines, it is interesting to see that the move up in the STI in recent sessions has met with resistance at the 38.2% line which is at 2,890.  This same resistance capped gains earlier in May.

If the STI is unable to break resistance at 2,890 this week, we would probably see the formation of a lower high on the weekly chart.  Two more sessions to go.  This has implications where chart patterns are concerned.  We might see the formation of a head and shoulders pattern which would be very bearish.

The rising 200dMA at 2,800 approximates the 61.8% Fibo line. This might give the STI some bounce but the bias is for a move downwards if resistance at 2,890 is not taken out convincingly. 

Breaking the previous low at 2,648 would probably see the STI sinking to the eventual target of 2,400 which, incidentally, is not a number plucked from the air but is provided by the 161.8% Fibo line.

Related post:
STI: Falling through the 200dMA.

NOL: Downtrend.

After hitting a high of $2.35 on 15 April, NOL was in a downtrend which was broken on 16 Jun on relatively high volume. Price hit a high of $2.13 on 21 Jun while forming an inverted white hammer, a reversal signal. This reversal signal was promptly confirmed in the next session. Forming a high of $2.13 on 21 Jun created a bearish picture because it was a lower high compared to the high of 13 May at $2.18.  This was a warning sign.

The MACD histogram turned red on 22 Jun while the RSI and OBV turned down the same day. Price has broken through various supports since then.  Price is currently resisted by the merged 20d and 100d MAs at $1.97.  With the 50dMA declining just above these merged MAs, it would be a difficult resistance to overcome without a buy up on massive volume.  Any upside could be resisted by the 50dMA just a few cents higher at $2.00. It seems that there are more sellers too if we notice how volume has increased as price declined since 21 Jun.  This is confirmed by the lower highs on the OBV which suggests that distribution activity has increased.

The MACD has formed a bearish crossover with the signal line and a retest of the flattening 200dMA which is currently at $1.83 seems likely.  As a support, the 200dMA was breached on three consecutive days in late May. So, this makes it somewhat unreliable and it is, therefore, a very important support to watch now.  If it manages to hold up, we would have a higher low formed.  A symmetrical triangle could then be in the works.  If the 200dMA support breaks, we could see the previous low of $1.75 tested.

Given the bearish technicals, I would sell at resistance at $1.97 if I have the chance to do so. If luck is on my side, I might even be able to sell at $2.00 on a possible whipsaw. Prices do not go down in a straight line and there could be little bumps up along the way.  So, a retest of the 100dMA as resistance again is possible. Of course, it might not be at $1.97 then. We want to sell at resistance and buy at supports.  Use the prevailing trend as a guide. Good luck.

Tea with AK71: iPhone with private videos.

I was surprised to see a Nuffnang ad in my blog just now offering a $10,000 reward for the return of a lost iPhone with private videos. Owner: Mr. Eddy Sun.  This guy must be in his early 30s going by his email address: eddysun77@gmail.com.  He lost his phone at Borders last night.

He has put up a blog just for the purpose of recovering his iPhone and it comes with a video clip of him making a personal appeal:



His blog: http://helpfindmyphone.blogspot.com/

I am posting this to help the poor guy spread the word since his Nuffnang ad comes and goes. I don't make any money this way but what the heck. Just trying to help.

If this is real, I wish him luck.  If this is a prank, it is in very bad taste and it's not even Earl Grey!

Charts in brief: 29 Jun 10.

CapitaMalls Asia: $2.14 looks like it is support turned resistance. We will need confirmation tomorrow. Price touched a low of $2.07 (the 138.2% Fibo line) before closing at $2.11, just 1c shy of the 50dMA at $2.12. The MACD has completed a bearish crossover with the signal line while the MFI continues to decline. There is a lack of demand at the moment and OBV suggests that distribution is ongoing.  It is also clear that as price fell from $2.22 five sessions ago, volume has expanded.  Immediate resistance is at $2.14 and immediate support is at $2.07.

Golden Agriculture: Formed an ugly black candle that is almost engulfing. Closing exactly on the 52c support after touching a low of 51.5c suggests that we might see continuing weakness, especially with momentum oscillators downtrending.  The MACD is about to form a bearish crossover. Next support remains at 50c.

Genting SP: It has been a while since I did a TA for this counter but Citibank says that this is one of their biggest SELL recommendations right now. That got me curious enough to look at the charts. For more than a week, this counter has been generating reversal signals: dojis and spinning tops. Today, volume expanded tremendously as price touched a high of $1.20 before closing at $1.15, forming a black candle.  MACD is about to form a bearish crossover. The RSI is at 87% and suggests that the rate of increase in its price has been too rapid.  MFI, on the other hand, is not in overbought territory yet and is still uptrending. OBV is flat which suggests that any selling is well absorbed. At the moment, the uptrend is still intact and immediate support is at $1.12 as suggested by candlesticks and the uptrend support line.

Citi says Genting Singapore is a “top sell”
Tuesday, 29 June 2010

© 2010 - The Edge Singapore

LMIR: Another lower high on the RSI as price formed a wickless black candle today, breaking the support at 47c to close at 46.5c. The lower Bollinger band is at 45.5c while I see a natural support at 45c. For anyone who wants to own some units of LMIR, buying smallish numbers at these prices could be good hedges.  I see 44.5c as a stronger support.

Related post:
Charts in brief: 28 Jun 10.

Charts in brief: 28 Jun 10.

CapitaMalls Asia: This is hanging on to support at $2.14 but barely so as price touched a low of $2.11 today.  The 20dMA which is providing support at $2.14 seems to be flattening. More significantly, I would like to draw attention to the fact that closing at $2.14 today is different from closing at $2.14 last Friday because the uptrend is now broken.  MFI continues its decline and the MACD looks set for a bearish crossover with the signal line.  I would not go long at $2.14 now.  The downside risk is too high.

Golden Agriculture: An inverted white hammer on lower volume. Momentum oscillators are flattish.  There is just no oomph in the upward movement in price today as it touched a high of  54c before closing at 53c.  Immediate support at 52c as provided by the 20dMA.

Healthway Medical: Its price is showing resilience as trading volume declined. 19c has been established as the immediate support. OBV is flattish and there is no sign of distribution. However, MFI and RSI are both hugging the borders of their respective overbought zones.  Might this exert some downward pressure on price or is this counter just doing a correction using time and would resume its uptrend once the 20dMA catches up?

SPH: This counter has been delivering pleasant surprises lately. Today, it closed at $3.88.  This effectively overcame the declining 50dMA as resistance. $3.88 was the eventual target of a mini double bottom I identified some time back.  I also divested some shares at this price not too long ago. The move up today was not accompanied by an expansion in volume.  So, I am doubtful about its strength.  However, the MFI and RSI are both rising and their uptrends are intact.  Momentum is good and if the price continues rising to hit certain Fibo lines, I might sell more of my remaining shares.

Related posts:

CapitaMalls Asia: Weakening technicals.

Golden Agriculture: Inverted black hammer.

SPH: Reading the lines.

CapitaMalls Asia: Weakening technicals.

CapitaMalls Asia broke out of its symmetrical triangle on 16 Jun on higher volume. It then went on to break resistance provided by the declining 100dMA which coincided with the trendline resistrance on 21 Jun. It was not able to advance much further and I suggested looking at the 100dEMA which made it clear why it was so.

In the last session, support was provided by the rising 20dMA and a short white candle was formed. The 20dMA in recent sessions has merged with the trendline support and, theoretically, should be a strong support.  This is the third time this trendline support has been tested.  If a trader had bought some shares of CapitaMalls Asia each time its price tested this trendline support, he would have made some nice gains.  So, is it time to buy again?

If we look at the RSI, the uptrend is intact, which suggests that price is rising at a sustainable pace. However, a lower high was formed recently. So, a loss of momentum is being registered.

In recent sessions, volume rose as price retreated. So, let us look at the MFI which accounts for both price and volume. Here, we have a less optimistic picture as the MFI has clearly broken its uptrend. This suggests that demand has dropped and that more selling is underway.  This is a major difference from when the trendline support in question was tested twice before. In those earlier tests, the MFI was still uptrending strongly. Technically, the picture is weaker now.

Resistance has been established at $2.22 and immediate support is at $2.14.

Golden Agriculture: Inverted black hammer.

CPO price has been in a downtrend since forming a double top in March this year. Following this, Golden Agriculture's downtrend started in early April. We have to remember that this company remains most dependent on CPO's price as it derives most of its profits from upstream activities. So, weakening CPO price is a big negative for it.

Resistance provided by the 100dMA proved too strong to be taken out and price formed a lower high at 55.5c on 21 Jun. In the last session, volume expanded as an inverted black hammer was formed, closing at the 52c support provided by the 20dMA.

MFI has formed a lower low, suggesting a lack of demand for the stock in the immediate term.  OBV has turned down. Clearly, distribution is taking place.

If the 20dMA support fails, using Fibo lines and drawing a trendline support from the low of 25 May, we derive an immediate downside target of 50c which happens to be a round number too.

The fundamentals are not supportive and the technicals are not strong. Cautious market participants who have resisted the temptation to buy in recently on a possible breakout at 55c should be breathing a sigh of relieve.


Related post:
Golden Agriculture: Resistance remains at 55c.

FSL Trust: Land ahoy?

On 18 June, news of the release of Verona I was greeted with some relieve.  However, price has closed unchanged at 38c since. I expect Nika I to be eventually released as well but would this be enough to reverse the fortunes of FSL Trust's unit price?

Obviously, FSL Trust is still in a downtrend.  Is the current phase forming a floor or a base? Would the declining 20dMA push the price down further? These questions are hard to answer definitely.  However, TA can provide some clues as to the psychology of market participants.  Let's see.

The MFI has been rising since 7 May.  This happened as the price continued its decline. MFI is derived from the combination of price and volume. A rising MFI is a sign of demand as money flows into a stock. Looking back, the MFI was declining from March to April this year while the unit price of FSL Trust was rising.  That negative divergence was a warning sign as smart money was flowing out of the stock. Another reason why I was warning people to stay away from FSL Trust back then. The opposite is happening now with MFI rising, money is flowing back into the stock as price declined.

OBV has been rising since 11 June and this suggests that accumulation is back. All this while, the RSI has been more or less flat and hugging 30%, no longer oversold.  This suggests that the speed at which the stock is being sold down is very much slower or, indeed, has stalled.

Immediate support is a band between 37.5c to 38c.  Immediate resistance is at 40.5c.  If price retests the recent low of 36c, I would pay attention to the volume.  If it is much lower than what was achieved on 11 Jun (5.64m units), we could have the first hint of a bottom.

Related post:
FSL Trust: Verona I.

SPH: Reading the lines.

It is quite obvious that the Bollinger bands started expanding on 17 Jun and price rose above the upper band for the next two sessions. However, resisted by the 50dMA, price has declined and went on to test the 20dMA as support in the last session. So, for next week, the important MAs to pay attention to would be the 50dMA as resistance and the 20dMA as support.  These would be at $3.86 and $3.77 respectively.  So, I would not renew my buy queue at $3.74.  I would instead wait to see how things turn out.

MFI and RSI are both rising and this tells us that momentum is positive. However, price itself has been choppy with interchanging black and white candlesticks in recent sessions. The MACD, although above zero, looks somewhat tired and we have had three red histograms in the last five sessions.  OBV is flattish. Technically, we could also make a case that price rose on rather low volume in the last session.

If the 20dMA fails as support, the next supports are at $3.72 and $3.68.  I expect $3.68 to be a stronger support as it was a many times tested support in the recent basing process.

Now, many have been talking about the possibility of the STI going down to 2,400 points.  Personally, I blogged about it as well earlier on in mid May.  You might want to read it here: STI at 2425 points?  If this happens, what would happen to the price of SPH's shares? Would it be spared? I think not.  Then, how low would it sink to? For a clue, let's look at the weekly chart.

I would draw your attention to the declining MACD.  This has been the case since late October 09. In the same period, price has risen somewhat.  This is theoretically unsustainable. In recent weeks, as price recovered somewhat, there is no corresponding rise in the OBV which suggests that price has risen due to a lack of sellers and not because of an abundance of buyers. Volume has been similarly lacklustre.

If we believe in fan lines where traders who missed the first uptrend gets a second and a third opportunity to buy in, it is quite easy to see that the stock is now on the third line.  The initial steeper trend has been flattening into one that is more sustainable.  However, if this third line, which happens to coincide with the rising 50wMA, should break, we could see price correct to the flattening 100wMA at $3.35. Yes, why not?

I have divested quite a fair bit of my shares in SPH. Let's see if I get to buy some again at much lower prices.

Related post:
SPH: Another pleasant surprise.

AIMS AMP Capital Industrial REIT: Stable.

Although the momentum oscillators have been forming lower highs and lower lows of late which is similar to LMIR's case, the OBV here shows a clear trend of accumulation. This has been the case since early March this year.  This is probably the reason for this REIT's relative price stability.  Everytime its price falls close to the long term support of its range, smart money would move in to accumulate.

I mentioned before that if the MFI continues to decline while the price remains at or above the 21.5c resistance turned support, it would be good news for the bulls.  Why? In the absence of positive buying momentum, if the price is able to stay up, it shows a lack of sellers as well.  When positive buying momentum returns once more, chances are higher, therefore, that price would be pushed up in such an instance.

Both the MACD and the signal line are rising above zero.  However, as price is technically still rangebound, this does not say anything more than the fact that momentum has returned to positive territory.

The 20dMA has completed a golden cross with the 50dMA today while the Bollinger bands continue to tighten. I liken this to the coiling up of a spring as price gets ready to move in either one direction. It might or might not be positive. We will have to wait and see.

LMIR: Distribution.

LMIR's volume expanded today as price fell to close at 47c.  Momentum oscillators, MFI and RSI, have formed lower highs and lower lows as the price continued to be resisted by the merged 100d and 200d MAs. I have mentioned a few times before that, of late, LMIR has been rising on weak technicals and, therefore, I would not add to my long position yet.

47c is a many times tested support level, a support level that gave way on 19 May.  At the moment, this support level is underpinned by the rising 20dMA and might be a tad stronger than it was back in May. If 47c gives, the next major support is at 45c.

The MACD has completed its turn down and seems set to form a bearish crossover with the signal line.  If it does this and goes below zero once more, the recent upmove in LMIR's price would be nothing more than a rebound in a downtrend which started in January this year.

I would keep an eye on the momentum oscillators at the same time as they could be predictive if we spot divergences. I still like this REIT's fundamentals and will wait for a more opportune time to load up.

Tea with AK71: Water, water everywhere.

The Cantonese saying goes "yao shui, yao choi" which literally translated would say "have water, have money". However, we know that we cannot have too much of a good thing.  Back in school, biology class taught us that if we drink too much water, we might get drunk but I am sure the effects are different from being drunk on alcohol!  Really bizarre.

Well, we are having too much water lately from the heavens.  On that faithful day when Orchard Road became a river last week, I was so drenched walking from the carpark to my office (yes, I don't have a sheltered carpark at work) even with a super large umbrella that I had to exchange my socks and shoes for a pair of slippers at work.  I was feeling quite miserable. 

Today, a bit wiser, I stayed home as the rain came pouring and left for work an hour later when conditions became slightly better.  Guess what.  The roads were still jammed.  Traffic on Jalan Bukit Merah was paralysed.  That was at 10.30AM.  Imagine that.  The last time it happened was when a huge tree fell across six lanes in both directions and till today, the authorities have yet to replace the fence which was destroyed on the center divider at the T junction with Jalan Membina. Residents there are not complaining and I have seen quite a few happily jay walking now that the barrier is gone to get to the bus stop on the other side of Jalan Bukit Merah. That tree fell on a day with strong winds and torrential rainfall just weeks ago.

Thankfully, by the time I arrived at work today, the rain became a light drizzle.  I half jokingly told a customer just now that the world is coming to an end.  Half jokingly because I know that extreme weather conditions are here to stay.  My major in the university was Geography and climate change was something I studied.  Half jokingly also because I have faith in the Singapore government to pre-empt and do the right things.  Building the Marina Barrage is one such example of a right thing.

By many estimates, the Earth would be a very different place by end of this century.  The sea level could have risen 70cm by then.  Imagine that. The polar ice caps would be almost totally gone and that goes for the glaciers in the mountains too. We have made such a mess of this world.

This is something I memorised for my "A" Level Literature class two decades ago:

"To her fair works does nature link the human soul that through me ran and much it grieves my heart to think what man has made of man" - William Wordsworth.

My memory has become a bit patchy over the years and I hope I have not mangled Wordsworth's words.  Still poignant, don't you think?

Flash floods come to the neighbourhood!

Singapore warns of heavy rain a week after Orchard flash flood
Friday, 25 June 2010

© 2010 - The Edge Singapore