Golden Agriculture: CPO price spiked 2.44%.

CPO price spiked 2.44% today to close RM58 higher at RM2,439.  The impressive appreciation aside, what is more significant is that the downtrend resistance established since the double top formation I have talked about before has been broken!  Is this the beginning of a sustained recovery or is the decline simply shifting to a lower gear?  Only time will tell.

Golden Agriculture's share price has yet to react to this bit of news or would it react at all?

From 26 April, we can draw two fan lines.  Price broke out of the first fan line resistance (in orange) and later on broke out of the second fan line resistance (in red). Since then, price seems to have moved into a range with resistance at 55c, provided by the flat 100dMA, and support at 52c, provided by the gently rising 200dMA.

Although the OBV is flattish, the MFI, which accounts for both volume and price, has broken out of its downtrend. So too has the RSI.  The halt in the decline of the MFI suggests that we are seeing a return in demand but this is probably balanced by the presence of sellers which is why the OBV is flattish. The dojis formed in the last two sessions suggest indecision and this reinforces the idea that we are seeing a delicate balance between the buyers and sellers here.

The MACD is gently rising in positive territory which indicates that the momentum is positive. So, although the current situation is still iffy, there is a slight upward bias observed. In the short term, the 100dMA resistance might be hard to break.  Look at the stochastics and we will see that it is entering overbought territory.  Upside could, therefore, be limited at 55c.

Fundamentally, if CPO price continues to recover while the share price of Golden Agriculture trades sideways, we might have an interesting proposition to go long here.  Buy in at 52c? Maybe. I am keeping an eye on this one.

Related post:
Golden Agriculture: Rebounding.

Saizen REIT: An update.

Saizen REIT has seemingly gone into hibernation.  For more than a month, its price has fluctuated between 16c and 16.5c. The daily MAs have all flatlined. Some may wonder if I am still interested in this REIT.  Well, I am still very much interested in this REIT.  It remains one of my top three investments in the stock market.  Regular readers of my blog would know that I believe it to be a very good investment with more than a fair bit of potential to deliver an attractive yield and possibly an even more attractive capital appreciation.

Today, the technicals are rather interesting.  Of course, with volume so thin, it could just be a mirage but let us do this just for fun, if nothing else. The MACD histogram shows a buy signal on a day that saw the formation of a dragonfly doji. The MFI, which has been impeded at 50% for some time, has finally risen above this resistance since falling below in late May. This suggests a strengthening demand, however slowly it took to develop. OBV is flat.  No obvious distribution or accumulation. In a rangebound situation, the stochastics could be telling and, now, we see it rising from the oversold region. 

There is only one word for investors of Saizen REIT: patience.  Those lacking in this virtue should not be vested in this REIT.  For the record, I have been vested since October last year.  I have done my FA and I believe this to be a gem.  I will continue waiting.  Patience, I believe, will be rewarded.

Related post:
Saizen REIT: CEO bought more warrants.

MIIF: Very high volume up day.

MIIF had a very high volume up day, forming an impressive white candle to close at 52.5c. In the last 12 months, the only time volume was higher was in October 2009.  MACD histogram has a buy signal as momentum oscillators turned sharply upwards. Immediate support is a band between 49.5c to 50c.  Drawing an uptrend support from the low of 44.5c hit on 7 Jun approximates the position of the 20dMA which establishes this MA as an important support to watch. Any upside targets? Using Fibo lines, 138.2% approximates a many times tested candlestick resistance at 55c.  So, I expect this to be a strong resistance.  If this is taken out, we could see price go higher to 56.5c, the 161.8% Fibo line.

MIIF +5.1%; Under pressure to return cash: BGC Partners
Tuesday, 13 July 2010

© 2010 - The Edge Singapore

SPH: BUY calls aplenty.

SPH: A slew of BUY calls from brokerages on the back of sterling results for 3Q10 sent the share price of SPH higher today. $3.95 resistance is now support. Up channel resistance has been broken. MFI and RSI continue their upward trends.  OBV shows continuing accumulation. Sell signal on the MACD histogram negated. Volume more than doubled as price touched a high of $4.00 today and closed 5c higher than the previous session at $3.98. Same question: $4.08? Looking more probable now. Punters who are considering a punt could possibly have an ideal entry point at $3.95 if this support is tested again.

Related post:
Charts in brief: 12 Jul 10.

Charts in brief: 12 Jul 10.

SPH: A sterling set of results with a 29.9% rise in 3Q net profit to $164.6 million from $126.7 million for the 3Q ending May. Could this push price to close higher tomorrow? Immediate resistance is at $3.95.  Closing higher than $3.97 would break the channel resistance and price could go much higher then.  With momentum still trending upwards, could we see $4.08? Perhaps.

Golden Agriculture: With the price of CPO firmly in a downtrend, the fundamentals are not looking up for Golden Agriculture. Momentum oscillators are downtrending and OBV is somewhat flat. Volume has, generally, been reducing since price recovered from the low formed on 24 May at 50.5c. We might be seeing the formation of a symmetrical triangle and there is a strong probability of price going lower. Immediate support is provided by the 200dMA at 52c.

Golden Agri target cut to $0.59 by Deutsche Bank
Monday, 12 July 2010

© 2010 - The Edge Singapore

LMIR: I think Mr. Market heard me.  Closing at 49.5c means that the downtrend resistance is broken. Momentum oscillators have similarly broken out of their downtrends. We could see the price testing the next resistance at 50.5c eventually if this keeps up.

Raffles Education: It might just turn out to be a short lived rally but a rather impressive one nonetheless. Price broke the downtrend resistance by touching a high of 34c before closing at 32.5c, forming an inverted cross which is bearish. Volume is also lower today as price attempted to move higher.  However, there is no negative divergence with the momentum oscillators yet. Could we see price trying to push higher again tomorrow? Perhaps. Immediate support is now the resistance turned support 50dMA at 32c. Could this hold up? It has to if price were to move higher.

NOL: A bearish engulfing candle. Frightful but the volume is much reduced on such an ominous black candle day. Therefore, is the counter just taking a breather? If the immediate support which is provided by the merged 20d and 100d MAs at $2 holds up, this could possibly be the case. If the support breaks, the next support is at $1.94.

NOL downgraded to Sell by Citi; Cuts target to $1.70
Monday, 12 July 2010

© 2010 - The Edge Singapore

Related posts:
LMIR: Recovering for real?
SPH: Up channel?
Raffles Education: A spectacular white candle.
Golden Agriculture: Rebounding.

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: