Marc Faber: S&P will not fall below 1,010.

 "If you are very bearish about the world long term, you would probably be better off in equities than in bonds." Marc Faber, 3 August 2010.

Genting SP: Weakness to continue?

On 17 August, I asked "Has Genting SP's sky rocketing price run out of fuel at last?" Price has shown some weakness as it retreated to the short term support of $1.50.  This support was compromised in the last session.  A sell signal on the MACD histogram appeared two sessions ago.  The silver lining is the low volume observed as price weakened.

Lower price and lower trading volume. What does this mean? The momentum oscillator to look at is the MFI. The picture of higher lows on the MFI is still intact. Demand has not crashed. There is no big downswing on the OBV either which suggests a lack of any meaningful distribution.

So, it seems that Genting, thus far, is experiencing a low volume pull back. Time to buy? On 17 August, I suggested $1.30 as a stronger support because it is "a candlestick resistance level which took many sessions to be overcome".  Has the picture changed?

The 20dMA has moved higher up and would provide immediate support in case of a sustained pullback.  It is currently at $1.35 which happens to be the low of 13 Aug.  Traders would remember this day as the day the counter gapped up on high volume. Expecting some support at $1.35, therefore.

In the news:
Who’s the businessman who lost S$26m in three days at RWS?

Genting SP: Black candle.

Has Genting SP's sky rocketing price run out of fuel at last? The price action is still above the upper Bollinger band and there is much room to fall in case of a pull back to the 20dMA, currently at $1.30. This is also a candlestick resistance level which took many sessions to be overcome.  This price is therefore psychologically stronger in the minds of market participants and should be a strong support.

Overall, momentum is still positive.  The higher low on the MFI suggests that demand is still intact.  This is despite some distribution taking place as suggested by the OBV turning down.

However, the price has moved up too quickly as suggested by the RSI which is in the overbought territory and this is being corrected.  All signs currently suggest that Genting SP's share price might just be taking a breather.

Healthway Medical: 17c support.

Some large transactions sold down shares of Healthway Medical at 17c today.  Volume, although higher, is not very much so.  Would the selling pressure continue? Where is the next support?

The MACD is plunging into negative territory, widening its distance from the signal line as it does so.  The momentum has clearly turned negative. With the lower highs we see in the MFI, it is obvious that demand is weakening.  OBV which has been sloping downwards gently took a bigger dip today, suggesting consistent distribution which accelerated today.

For sure, there is a chance price could decline further.  If it happens, the next support is at 16c, a many times tested support level in April. Given Healthway Medical's fundamentals, I feel that it is expensive even at 16c but we might see momentum oscillators entering oversold territories by then and that could bring about a brief rebound. I would pay attention to the volume as price declines.

Related post:
Healthway Medical: Second quarter results.

Saizen REIT: Sold down.

A few big transactions today, selling down Saizen REIT units.  One single transaction sold down 2m units at 15.5c.  This caused the OBV to plunge today and the MFI to sink deeper into negative territory. Distribution coupled by a reduced demand.  Not a pretty picture.

However, checking for announcements by Saizen REIT did not show any sale by insiders or substantial shareholders.  I suspect some retail investors are losing patience again.  Momentum is clearly negative as the MACD continues to decline beneath the signal line in negative territory.

At this rate, we could possibly see 15c tested as the next support. If that happens, I would buy more.

Mapletree Investments, a real-estate firm wholly owned by Singapore state investor Temasek Holdings, plans to launch a Japan property fund of around 80 billion yen (1.3 billion) this year in a bid to expand in the country’s property sector ahead of its rivals....

....Japan’s property market, the world’s second-largest and heavily leveraged, was hit hard by the onset of the global financial crisis and has yet to see a major investment since then.

But some Asian investors including wealthy Chinese individuals have begun showing an appetite for assets in Japan, whose property market is considered relatively transparent and yields stable returns.

Mapletree plans $1.3b Japan property fund
Monday, 16 August 2010

© 2010 - The Edge Singapore

Golden Agriculture: Chinese demand on the rise.

Price closed 1c lower at 57.5c today. The weakness is accompanied by a much reduced volume.  So, I am not too worried. Looking at the other indicators, we see the MFI forming a higher low, suggesting improving demand.  OBV is likewise rising, suggesting more robust accumulation activities.  The RSI has bounced off 50% which acted as support, suggesting a return of buying momentum. Any further weakness should see strong support at 55.5c as provided by the 100dMA.

The fundamentals are strong and the momentum oscillators are promising.  I would accumulate on weakness.

China's vegetable oil demand is entering a seasonal high, buoying edible oil and feedmeal prices, as the Mid-Autumn Festival and National Day holidays approach. 

"There is a supply reduction in oilseeds and this is leading to greater dependency on palm oil as supply growth is lagging behind demand," a senior trading executive at Malaysia-based major plantation company said. 

-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com

Healthway Medical: Second quarter results.

Healthway Medical announced that it has entered into agreements with twelve (12) medical and dental centres in Shanghai and Hangzhou.  To operate and manage these facilities, an investment of RMB38m (or S$7.6m) is required over a period of three months. They hope to increase the number of facilities under management to more than twenty by end of this year.

At the same time, Healthway Medical also released their second quarter results and the numbers look bad.

1. Revenue compared to the same period last year has tumbled 12.3% from S$24.45m to S$21.44m.  This is worse than the first quarter when the revenue declined 6.3% compared to the same period a year ago.

2. Staff cost increased 22.9% which suggests that Healthway Medical is paying a lot more now to retain or to recruit staff.  In terms of absolute dollars, the increase from S$10.75m to S$13.2m is no small change.

3. Profit before income tax is an insignificant S$165k compared to S$5.23m in the same period last year.  This is much worse than the first quarter profit of S$1.4m.

4. Cash flow from operations is a negative S$2.3m compared to a positive S$4.05m in the same period last year.  However, it is an improvement over a negative S$4.94m in the last quarter.

5. Cash flow from financing activities is still a positive S$18.79m and the company has S$32.6m in bank deposits.

6. EPS for the quarter is 0.01c, down from 0.32c in the same quarter last year and down from 0.09c in the last quarter.

Fundamentally, Healthway Medical's numbers in the first quarter were relatively bad but they are now worse.  See second quarter statements here.

On 16 May, I blogged about Healthway Medical's first quarter results.  I said: "As an investor, to be prudent, I would continue to wait for greater clarity on whether higher earnings would follow, maintaining that the share price at current level does not offer good value."  This opinion has not changed.

Although Healthway Medical has taken another important step in its expansion plans in China, risks still exist and it remains to be seen if the management is able to execute its plans successfully and deliver value to shareholders.  With weakening revenue and rising costs at home and possible teething problems in China, investing in Healthway Medical at the current price is not for the faint hearted.

On 11 Aug, I blogged about how Healthway Medical's support at 18.5c has been compromised and that price could go lower. It is likely that 17c could be tested as a support sooner than later.

Related post:
Healthway Medical: A weak first quarter.
Healthway Medical: Support compromised.

Charts in brief: 13 Aug 10 (Part 3).

Noble: Looking at Noble's chart, the double top formation is quite obvious. If this is a valid formation, we could possibly see price declining to hit $1.20.  Top at $2.20, neckline at $1.70, target at $1.20.  A scary possibility? Price closed at $1.54, the low formed on 20 May.  Could this hold?  Well, the MFI just dipped into oversold territory.  RSI continues to sink in oversold territory.  OBV shows continuing distribution.  Price could enjoy a brief rebound and should meet with resistance at $1.64 in such an instance.

Noble cut to Hold by DBS Vickers with $1.62 target. DBS Vickers says 2Q10 results dismal, with earnings down 65% on year at US$86.6 million ($118 million).
Friday, 13 August 2010

© 2010 - The Edge Singapore

KGT: I am still interested in collecting some units of KGT.  However, the price refuses to fall below $1.10.  When I first blogged about KGT, it was at $1.06 and I said I would wait for $1.00.  Doesn't seem very probable now. However, I decided to sneak a peek at the charts. 

Well, not much to work on but notice that price has been trading below the 20dMA in recent sessions with a falling MACD. MFI has formed lower highs which suggests a falling demand. The RSI has likewise been falling suggesting increasing selling pressure over time. We could see KGT at under $1.10 again if this keeps up.  Good things come to those who wait?  Of course, if the counter goes CD soon, it could change everything.

Related post:
K-Green Trust: A stable source of passive income.