FSL Trust: The skies are clearing up.

Price stayed above the 20dMA in the last three sessions. The 20dMA, currently at 38.5c, is now resistance turned support. I decided to look at the 20dEMA as well.  The EMA gives greater weightage to recent prices and could sometime explain why price could not move past a certain point in the short term.  The 20dEMA is at 39.5c and seeing the price closed at 40c in the last two sessions is comforting.  However, the volumes were very low and the durability of the recent appreciation in price is questionable.  In fact, since a spike in volume on 18 Jun when the MACD made a bullish crossover with the signal line, volume has been reducing.

Let us look at some other technical indicators to gain more insights. The MACD is rising and pulling away upwards from the signal line in negative territory. The rising MACD is due to the upturning 20dMA, reversing its decline. Although this seems promising, the MFI has gone below its uptrend support due to the very thin volume in the last session as price stayed at 40c. Immediate demand seems to have reduced and some suspect that market participants are waiting for greater clarity.

Although the technicals are not totally inspiring, Mr. Market might spring a pleasant surprise on us and a further move upwards could see the gap filled at 43.5c which in the next session coincides with the declining 50dMA. Immediate support is a band from 39.5c to 38.5c. For anyone who wishes to buy into FSL Trust, technically, it would seem safer to do so now.

Related post:
FSL Trust: Above the 20dMA.

LMIR: Recovering for real?

In the last session, LMIR touched 48.5c, a lower high formed on 22 Jun. Is LMIR's unit price recovering for real and will it go higher? Can't say for sure but recent technicals are supportive of a more bouyant price as we see the MFI, a momentum oscillator that aggregates volume and price, forming higher lows since hitting a low on 21 May. However, trading volume has declined quite a bit in the last four sessions as price rose. Volume is the fuel of a rally and if it dries up, gravity could do its job.

If we look at the longer term trend, MFI has been forming lower highs and this trend suggests reducing demand.  OBV has been forming lower highs which suggests that there is greater distribution than accumulation.  In fact, the downtrend which started on 11 Jan 10 is still intact.

I blogged about my move to reduce some exposure in LMIR about a month ago at a lower high of 47c, recognising the longer term downtrend. On hindsight, that was a bit too soon and I should have used the long term downtrend resistance as a guide instead.

What is my plan now? Frankly, I do not know why the market dislikes LMIR apart from a suspicion that maybe it is applying an "Indonesian discount" to the REIT. I still like the fundamentals but the technicals are wanting. 47c is resistance turned support but it could become resistance again as the 50dMA is still declining. LMIR is probably on its second fan line (which I have drawn in orange color).  Both fan lines have their source at the low formed on 25 May at 42c. We could possibly see the formation of a third fan line in time which suggests that price could touch a low of 45.5c once more. This is a support shared by both fan lines and history might repeat itself.

I still have a large investment in LMIR despite the reduction in exposure I just mentioned. Although the technicals are pointing towards a higher probability in the continuation of the longer term downtrend, a significant increase in volume together with price moving higher would negate this.  Of course, there is no way we can tell if this would happen but it could.  We can only wait and see.

STI: 2,980 next?

How different things look after just one week. The much talked about head and shoulders pattern seems to be turning elusive. 2,400 points on the STI seems to have become just a horror story told to scare the uninitiated.  These are things which even experienced chartists thought quite likely, not just some amateur TA practitioners.  This is another example of how everything works on probabilities, never absolutes.

The MACD averted a bearish crossover with the signal line on 1 July.  On 6 July, a bullish engulfing candle was formed and the MACD started pulling away upwards from the signal line, another bullish sign. Now, a white candle is pushing the upper Bollinger band and the bullishness could continue to test 2,947 next or thereabouts as indicated by the 123.6% Fibo line and, possibly, 2,982, the 138.2% Fibo line. Could it go higher to retest the high of 3,037 achieved on 15 Apr? Who can say for sure?

2,890 is now immediate support as the 20dMA seems set to form a golden cross with the 100dMA next.

Related post:
STI: 2400 is still a real possibility.

SPH: Up channel?

Although it formed a black candle, SPH is still trading above the eventual target price of $3.88 I set for the mini double bottom formed in May/June earlier. It is also trading above a cluster of MAs which should now provide some support instead of resistance. The next target is $4.08 if the mini double bottom is a valid pattern.

MFI is in an uptrend and this suggests strengthening demand. So, although there is a sell signal on the MACD histogram, we could be seeing the beginning of an up channel. If this pans out, then, buying at channel support and selling at channel resistance could yield some nice gains. The channel support is now at $3.80 or so.

Of course, if price goes parabolic next week, SPH could hit $4.08 very quickly.  Then, I would sell more of my shares.  A parabolic move in price is mostly unsustainable.

My plan? If price drops to the cluster of MAs, approximating the trendline support, buy some.  If price goes higher and hits the $4.08 target, sell some.

SPH off 0.5%; Eyes on 3Q10 results, 2Q10 GDP. Investors pausing for breather while awaiting media group’s fiscal 3Q10 results, guidance for coming quarters due Monday. Some analysts expect more upside for stock pending Singapore’s advance 2Q10 GDP data due July 14.
Friday, 09 July 2010

© 2010 - The Edge Singapore

Related post:
Charts in brief: 5 Jul 10.

Charts in brief: 9 Jul 10.

NOL: This counter touched a high of $2.07 which is the initial resistance identified earlier. Volume is much lower today as it closed at $2.06, 5c higher than the previous session. The MACD has crossed the signal line and returned to positive territory at the same time. OBV continues to climb, suggesting further accumulation is taking place.

What has formed could be a symmetrical triangle. With the negative divergence between price and volume largely corrected, we could see a breakout in the next session which could eventually see price testing the high of $2.35 touched on 15 April.  Before that happens, expect multiple resistance along the way.  In case price fails to move higher, immediate support is at $2.00.

Genting SP: Continues to be resisted at $1.20. Volume is declining. MFI which accounts for price and volume is declining and forming lower highs.  Demand is falling.  OBV is tired looking. The Bollinger bands seem to be in the early stage of narrowing.  Could the price move higher? With the 20dMA still rising, the shorter term uptrend is intact. It remains to be seen if the 20dMA could push the price higher. This is not for the faint hearted.

Genting Singapore target raised by UOB-KH to $0.97. Still, UOB KayHian is keeping its Sell call on view valuations pricey. Broker says non-gaming operations like Universal Studios Singapore theme park will continue to lose money in near term.
Friday, 09 July 2010

© 2010 - The Edge Singapore

Related post:
Charts in brief: 8 Jul 10.

Raffles Education: A spectacular white candle.

Volume expanded nicely as a wickless white candle was formed. Price broke resistance at 29c as provided by the 20dMA and closed at 32c resistance, provided by the 50dMA. Is this the extent of the upmove or would the price move higher? The RSI has been forming higher lows of late.  The MFI too.  Momentum and demand are positive in the short term but it could be a reaction to the oversold situation.  

If this is just a rebound, we could see the downtrend resistance at 33.5c capping further gains.  The MACD is rising but still in negative territory.  So, the possibility that this could be a short lived rebound cannot be discounted.

This counter has been in a downtrend since it peaked in Jun 09. Every single rally attempt was capped by downtrend resistance. Looking at the MFI over a longer period, we would realise that it has been forming lower highs since early this year. This affirms a longer term weakness in demand.  So, for people considering a punt, be careful.

We want to see volume expand more significantly, taking out 33.5c resistance, if a reversal should take place.  This would break out of the shorter term downtrend resistance.  Next resistance level would be at 35c then.

Tea with AK71: Hope.

I coined a phrase "Hope Analysis" aka "HA" a few years ago amongst my investor friends. This is a word play on FA and TA. In those days, I was a FA guy and not a very good one too. Did not know anything about TA yet.  Then, there were people who would buy stocks based on gut feel and hope for the best.  These were the people whom I called HA practitioners. Cheeky of me, I know.

Actually, there is nothing seriously wrong with HA.  We are human beings after all and there must always be hope or else life would be bleak indeed.  I remember receiving pamphlets in my letterbox when I was much younger with words in big bold letters: "There is Hope!".  Ok, ok, I am being cheeky again.

When we use FA, we can only hope that we have done a good, thorough job of it. We can only hope that things would turn out the way we think they should.  When we use TA, we might also hope that things would go the way we think they should.  Of course, some hard core FA or TA practitioners would say that hope should not be in the picture.  Some would say that FA is about skills and foresight and TA is emotionless and we should just let the charts talk.

More enlightened practitioners would realise that, whether FA or TA, there are no absolutes.  Everything is about probabilities.  The closest we can get to being absolute is therefore 99.9999%.  Ok, you might want to add more 9s if you like to infinity but you get the point.  99.9999% is as fine a gold bullion as we can get as well.  I doubt we can find 100% pure gold in this world.  Impurities? You bet. They are part and parcel of life.  We can reduce impurities but it is near impossible to eliminate them.

What about FA plus TA? Well, it is just another approach.  I dare say that HA has a place too. Good luck.

A movie: "The Sorcerer's Apprentice"

Cool! I must try to catch this one:

Charts in brief: 8 Jul 10.

CapitaMalls Asia:  Is this counter just rebounding from oversold levels or is this the beginning of an uptrend? The recent low of 6 Jul at $2.02 helped to establish the third fan line.  This is a gentler uptrend compared to the earlier two fan lines.  All three fan lines originate from the same low of $1.91 achieved on 7 May. Distribution reached a peak on 2 Jul as volume expanded on two consecutive black candle days. The lower volume on the two black candle days compared to higher volume on up days after that suggests that we have reached a floor and price is turning up. Volume expanded today as price moved higher to close at $2.07.  Forming a doji, however, suggests that the buying lacks conviction. Immediate resistance at $2.10 and if momentum stays positive, we might see $2.13 tested too.

CapitaMalls prices Malaysia Trust at bottom of range. CapitaMalls Malaysia Trust’s units were offered to institutions at 1 ringgit apiece, while shares were sold to individual investors at 98 sen each, it said. The 852 million ringgit ($369 million) initial public offering, the second- biggest in Malaysia this year, was earlier priced at between 1 ringgit and 1.10 ringgit a share for large investors.
Thursday, 08 July 2010

© 2010 - The Edge Singapore

Golden Agriculture: Negative divergence between price and volume is quite obvious to me. Today's white candle has closed above the downtrend resistance. However, this was achieved on much lower volume. Is this sustainable? Theoretically, no. Next resistance at 55c. CPO continues its downtrend and is at RM2,290 today. The double top achieved earlier this year at about RM2,700 could see price of CPO correcting to about RM2,100 in time.  This is not good for Golden Agriculture's bottom line.

Genting SP: Continuing its levitation act despite an obvious negative divergence between price and volume. MFI, which accounts for price and volume, is in a downtrend.  Demand has fallen but price remains quite bouyant. Unless volume expands significantly and the resistance at $1.20 is taken out convincingly soon, this is a sign of churning and perilous for anyone who chooses to go long now. A retracement would find initial support at $1.12.

Genting Singapore gains as Merrill Lynch raises price estimate
Thursday, 08 July 2010

© 2010 - The Edge Singapore

NOL: Volume expanded tremendously as price gapped up and formed an impressive white candle. Breaking resistance formed by a confluence of MAs is likely to see price moving higher.  I see initial resistance provided by the downtrend resistance at $2.07 in the next session.

NOL +4.2% on Maersk’s revised 2010 outlook. NOL has already flagged losses for 1H10 after staying in the red for whole of 2009, but improving operating conditions suggest company may return to profitability in 2Q10.
Thursday, 08 July 2010

© 2010 - The Edge Singapore

LMIR: Technically, I still see a negative divergence between price and the MFI. The doji formed today could even be the set up of an evening star pattern. Having said this, if the uptrend support holds up if next tested, it could be a sign of firm underlying support and the rising OBV since price touched a low of 42c on 25 May does suggest that there is more accumulation than distribution going on.

LMIR: Gravestone doji.

After a valiant attempt to break out of resistance in late June as price hit a high of 48.5c, LMIR has retreated to close at 46.5c today, forming a gravestone doji in the process.  This took place after a session of high volume buy ups yesterday when a white candle was formed but ultimately, the price was resisted by a combination of the 20d and 50d MAs at 47c.

It is clear from the OBV that since hitting a high of 48.5c on 22 Jun, there has been greater distribution than accumulation of units of LMIR.  The RSI has been forming lower highs which suggests a sustained momentum in the price decline. The MFI enjoyed a brief bump upwards yesterday as volume rose on a white candle day. It has, however, turned down again today. The MACD is below the signal line and looks set to cross into negative territory. The technicals are, undoubtedly, bearish.

FSL Trust: Above the 20dMA.

FSL Trust, for the first time since 23 April, closed above the 20dMA which is currently at 38.5c. Bollinger bands are squeezing which indicates the possibility of a big move in either direction.  In this case, chances are the move would be positive.

Momentum oscillators continue to rise.  The MFI has formed another higher low as it rises above 50%.  Demand is back. RSI too formed a higher low which suggests that price is rising at a good pace. OBV is flattish which suggests a lack of heavy distribution.  Perhaps, the sellers are done selling.  MACD continues to rise above the signal line but is still in negative territory.  This could just be a rebound.  Although volume increased today, it is rather modest compared to the volumes on the black candle days which sent the price down to where it is today. Volume will have to expand more meaningfully in future sessions to try and push the price higher.

The low of 11 Jun at 36c could indeed have been the bottom.  However, we need confirmation in the next session that the 20dMA at 38.5c is indeed resistance turned support. Once confirmed, price could possibly rise to close the gap at 43.5c which approximates the declining 50dMA if momentum remains positive.

Related post:
FSL Trust: Land ahoy?

Golden Agriculture: Rebounding.

Golden Agriculture dipped briefly below the 200dMA before moving higher to close at resistance provided by the 50dMA at 53.5c.  This coincides with the trendline resistance which connects the high of 26 April at 62c and the lower high of 21 Jun at 55.5c.  This is the second downtrend. The first one connects the high of 26 April and the lower high of 13 May at 56.5c.  The second downtrend is gentler than the first and less dramatic.

Although trading volume increased today, it is not very heavy.  This might just be a rebound but if we believe in fan lines, price could move higher to break the trendline resistance to retest 55c as resistance.  This resistance level is quite obvious from past candlesticks and it is also where we find the flattish 100dMA. If the rebound is strong, price could even go up to 56c to retest resistance established earlier in May when the lower high of 56.5c was formed.  That, I believe, might be the extent of the current upmove.

MFI, a momentum oscillator which accounts for both price and volume has been in decline and this suggests a weakening demand. Price is probably moving up due to a lack of sellers and not because of an abundance of buyers. OBV is up which suggests that some accumulation is happening and there is some support. Downside could thus be limited.

Price of CPO is still entrenched in a downtrend and it does not look like the situation would be improving anytime soon.  The fundamentals are not strong but the share price is enjoying a bounce.  Immediate support at 52c and immediate resistance is at 53.5c.  If resistance is taken out, next resistance is a band from 55c to 56c.

Charts in brief: 5 Jul 10.

NOL: MFI did not manage to recapture 50% as support and its continuing decline suggests a lack of demand.  RSI similarly did not manage to recapture 50% as support and this suggests the speed of decline in price is relentless. Downtrend in price is intact. Since forming an inverted hammer on 21 Jun, volume has increased as price declined.  In the last two sessions, trading volume has fallen somewhat. This might or might not be a temporary respite.  I see support at the flat 200dMA, $1.83, and resistance at a confluence of MAs, $1.98.

SPH: Price touched a high of $3.88 again. MFI is rising sharply.  Demand is strong.  OBV is rising.  Accumulation is ongoing. Volume is, however, a tad lower today.  Breaking $3.88 could possibly see a target at $4.08 reached. Resistance at $3.95, the lower high formed on 10 May, would have to be taken out first, in such a case.

Metro: This counter has been in a downtrend since it peaked on 7 Jan, touching a high of 90.5c. Since May, indicators are showing some strength returning.  MFI has been climbing since late May.  OBV has been rising since late May.  RSI has been rising since early May.  The peak in distribution happened on 25 May as an ugly black candle was accompanied by a huge spike in trading volume.  A low of 73.5c was touched in two separate sessions on 21 May and 7 Jun.  That likely is the immediate support for now.  With momentum oscillators bouyant, it is unlikely that 73.5c would be taken out anytime soon.  In fact, the 20dMA has been rising gently since middle of June. The trend is still down but the worst might just be over, for now.

Related posts:
NOL: Downtrend.
Charts in brief: 2 Jul 10.