Genting SP: Bollinger bands narrowing.

The Bollinger bands are narrowing on Genting SP's chart.  This usually precedes a large magnitude price movement. Would it be up or down? Your guess is as good as mine.

Yesterday, I mentioned that "the 20dMA was breached as recently as last week (and) does not inspire confidence that it would be a strong support". Today, price broke under the 20dMA and it seems that $2.02 is now resistance but this needs confirmation. Price could retreat to the recent low at $1.85 which could act as immediate support. If that breaks, we could see the rising 50dMA as the next support.

The MACD continues to decline beneath the signal line in positive territory while the MFI has formed a lower high. The correction is in earnest but overall momentum is still positive.

Related post:
Genting SP: Fatigue.

Hock Lian Seng: Retreating.

On 5 Oct, I mentioned that there was "strong demand and accumulation but buying momentum (was) muted by strong selling pressure at resistance (32c)" and that "I sold some of my shares at the 32c target .... Although I still see strong support at 30c where we find the rising 20dMA, 30.5c could very well be resistance turned support."

Today, Hock Lian Seng retreated and closed at 30.5c, the support provided by the 20dMA. However, the retreating price is on the back of much reduced volume and does not worry me. Could the support at 30.5c hold? With the MACD on the verge of forming a bearish crossover with the signal line, we could see share price tested further on the downside.  This is especially true when we realise that the MFI has been entrenched in overbought territory for a few sessions now. This could be corrected in future sessions.  The RSI has formed a higher high which suggests to me that the buying momentum is intact.

What would I do? Notice that the 20dMA has been guiding the price of this counter higher? See the uptrend support is in between the 20dMA and 50dMA? This would be at about 30c.  The 50dMA is at 29.5c.  I would buy more at these price levels.  For anyone who is not vested but would like to be, buying some at the 20dMA (30.5c) could be a nice hedge.

Related post:
Hock Lian Seng: Target hit.

AIMS AMP Capital Industrial REIT: Resistance.

This REIT's price action is testing 23c resistance, the upper end of the old trading range (20c to 23c).  Looking at the trade summary, of the 58 trades done, more than half (36) were buy ups at 23c but the volume was only 260 lots out of a total of 2,339 lots which changed hands.  This suggests to me that the buy ups at 23c lacked conviction.  23c is still a significant resistance to watch, it would seem.

Could 23c be taken out? The MACD has completed a bullish crossover with the signal line in positive territory. The MACD histogram buy signal has been confirmed.  OBV is up, suggesting accumulation.  MFI has formed a higher low, suggesting that the longer term demand is intact.  There is a chance that 23c could be taken out.  Then, the next resistance would be the recent high of 23.5c.

With all the daily MAs rising gently, this REIT could be on a sustainable uptrend and I would accumulate on weakness.

Related post:
AIMS AMP Capital Industrial REIT: Good value.

Japanese Yen at 15 year high.

I have been following news reporting on the strength of the Japanese Yen as well as the actions taken by Prime Minister Naoto Kan's team.  I am, naturally, very interested in economic and financial news from the Land of the Rising Sun as I am vested in Saizen REIT.

I applaud Bank of Japan's (BOJ) decision to cut its interest rate to zero recently.  This would, in theory, make credit cheaper and more readily available in the country. This would encourage borrowing and could possibly give the economy a shot in the arm. However, taking note that the interest rate was near zero to begin with (at 0.1%), cutting its rate to zero could have limited positive effects.

For investors in Saizen REIT, a strong Yen is good because we receive income distributions in S$. However, a strong Yen is not good for Japan as, being an exporting economy, a strong Yen reduces Japanese companies' competitiveness. As Japanese MNCs repatriate earnings back to Japan, a stronger Yen reduces the value of repatriated earnings. A stronger Yen could also propagate the deflationary spiral which Japan is suffering from.

While, as investors in Saizen REIT, we want to have a strong Japanese Yen, we want it strong enough to give us good returns (i.e. an attractive yield on our investment) but we do not want it so strong as to jeopardise the well being of the Japanese economy as that would, in time, have negative ramifications for Japanese residential real estate.

Latest update:
The dollar was trading at 82.36 yen in Tokyo midday.
08 October 2010 1231 hrs, CNA.

Related post:
Japan's debt issue and Saizen REIT.

AIMS AMP Capital Industrial REIT: Good value.

On 28 Sep, I mentioned that I bought more units at 21.5c believing that the REIT still offered good value at this price with a yield of 9.67%.  I also said that "21.5c is psychologically important as it is the midpoint of the old trading range of 20c to 23c".

Today, we see some quiet buying up in this REIT. Of the 2,085 lots which changed hands, 1,672 lots were bought up at 22.5c. Technically, this has created a buy signal in the MACD histogram. The MFI has just dipped into oversold territory while the RSI is bordering on oversold.

There are some who believe that the price would suffer on the 15th when the rights units commence trading with pessimistic forecasts of as low as 20c. If people are willing to sell at 20c, well, I am willing to buy as that would give me a yield of 10.4% per annum.

Related post:
AIMS AMP Capital Industrial REIT: Cheaper please.

Genting SP: Fatigue.

Price gapped down today and formed a doji, closing at $2.03. It is quite obvious now that a lower high was formed yesterday and price is being supported by the 20dMA today. That the 20dMA was breached as recently as last week does not inspire confidence that it would be a strong support.

The MACD histogram has turned red, a sell signal, while the MACD continues its decline beneath the signal line in positive territory. The correction has resumed. MFI and RSI both formed lower highs which suggest reduced demand and slowing buying momentum. OBV suggests ongoing distribution.

Unless there is a sudden spike in volume in buying up, the odds are that prices could move lower and the next support, if $2 should break, is at $1.85.  Of course, just as prices do not move up in a straight line, prices would not move down in a straight line either. There is always a river of hope.

K-REIT: Immediate target.

I suggested that K-REIT's price action could be falling into trading bands.  If we look at the chart, it seems quite obvious.  Today, price traded at and above $1.34, the resistance identified on 14 Sep when I said "K-REIT seems to be trading in a 6c trading range recently: $1.16 to $1.22 and $1.22 to $1.28".  I also said "in the event that $1.28 resistance is taken out, one could therefore expect $1.34 to be the next resistance level."

With $1.34 now possibly resistance turned support, the next resistance level should be at $1.40.  This is likely to be a stronger resistance level as it is also a round number.  Fundamentally, at $1.40, K-REIT would be trading at a mere 4.8% discount to NAV and its yield would be pretty low at 3.8%. I would probably do a partial divestment if price does test $1.40.

Related posts:
K-REIT: Moving into the next band?
FCOT, CCT and K-REIT.

Buying gold? Wait for a correction.

Jim Rogers predicts "more turmoil" in the currency markets, more problems in the stock market, weakness in bonds and, ultimately, inflation.

 
Posted Oct 06, 2010 07:30am EDT by Aaron Task

"Gold could correct for a few months [but] the bull market in gold is not over - far from it," he says. "I'm much more bullish on agriculture than I am even on gold. I own both."

In the meantime, he owns the Swiss franc, euro and yen but is not actively short any currencies, including the greenback.

In case of a correction, I see immediate support at US$1,250 an ounce, followed by US$1,200 an ounce.

Related post:
Gold can double from here over the next 5 years.

FSL Trust: Approaching target.

On 9 August, I said that "I also have some units which I bought in the recent crash. Why? I explained that the purchases were made based on TA and are for a trade. Looking at the charts, FSL Trust's price has not just found a floor, it has most probably bottomed.  So, would I sell at the bottom?  No." and that "From a FA perspective, it is true that FSL Trust has very high risks and its propects seem bleak in the longer term but would it go belly up in the next few months? Rather unlikely as the world economy is still on the mend and the fortunes of the shipping industry are looking up."

On 4 October, I said "46c is still the resistance to watch although it was briefly taken out today on higher volume. Eventual target remains defined by the descending 200dMA, currently at 50.5c."

Today, a white candle was formed as price closed at 47.5c.  46c could possibly be resistance turned support and we are a step closer to the eventual target. MACD has been rising in positive territory. MFI has formed higher lows and higher highs. Things are looking benign. However, volume is lacking suggesting that a lack of sellers rather than an abundance of buyers is the reason behind the price appreciation. This puts into question the sustainability of the recent buoyant price action.

Related posts:
FSL Trust: Where to from here?
FSL Trust: Challenging resistance.

Gold and silver: New highs.

"Gold, up 2pc this year, is heading for its 10th consecutive annual gain, the longest winning streak since at least 1920. On Tuesday, bullion for immediate delivery added as much as $13, trading at $1,326.97 an ounce in early London trading....

"Also on Tuesday, silver advanced to a 30-year high, increasing 1.3pc to $22.2319 an ounce – the highest level since September 1980. "

Read complete article here.

Related post:
Gold can double from here over the next 5 years.
Buy more silver on weakness.

ASTI: Testing support at 11c.

ASTI's share price tried unsuccessfully in earlier sessions to stay above the 12c resistance. Today, share price closed at 11c amid weakening technicals.  The MACD just completed a bearish crossover in positive territory.  RSI is testing support at 50% which suggests weakened buying momentum.

11c is where we find the rising 50dMA.  A stronger support would be at 10.5c which is where we find the rising 100dMA which coincides with the uptrend support line. I believe that the fortunes of the semi-con industry would continue to improve and would, therefore, accumulate if ASTI's share price should retest support at 10.5c.

Related posts:
ASTI: A doubling of share price in time.
ASTI: Breakout, almost.

Hock Lian Seng:Target hit.

On 27 Sep, I mentioned that "A support seems to have formed at 30c for this construction stock.  Further upside would give a target of 32c." Today, Hock Lian Seng's share price touched a high of 32.5c before closing at 31.5c as volume exploded.

The MACD completed a bullish crossover in positive territory as the MFI spiked into overbought territory while the OBV turned up sharply. The RSI, however, is somewhat lukewarm and has yet to break out from a series of lower highs.  This coupled with a white candle formed today with a long upper wick puts into question the sustainability of today's upmove in price. Interpretation: Strong demand and accumulation but buying momentum is muted by strong selling pressure at resistance (32c).

I sold some of my shares at the 32c target today. Although I still see strong support at 30c where we find the rising 20dMA, 30.5c could very well be resistance turned support. I would buy again if it gets to those levels. Immediate resistance remains at 32c and if that breaks convincingly, the next target is at 34c.

Related post:
Hock Lian Seng: 32c target.

Raffles Education: A trading opportunity.

I have not done any trading for a long time.  Today, I took a look at Raffles Education's chart and it looks to me like a positive divergence is forming between the downtrend in price and the MACD.  As price formed lower highs, the MACD has been forming higher lows.  Last week, a higher low in price was formed.  This is a positive sign.

Look at the MFI and we see higher highs which suggest increasing demand. Look at the OBV and we see accumulation strengthening.  Look at the RSI and we see higher highs which suggest positive buying momentum.  These signs point towards a possible reversal of the downtrend.

Also, as price declined in the recent sessions, volume similarly declined which suggests that a classic low volume pullback is taking place. There is an absence of strong selling pressure.

Having said all these, immediate resistance at 29.5c has to be taken out convincingly.  If this is achieved, I see an eventual target of 34c (161.8% Fibo and also defined by the descending 200dMA) with some resistance at 32c.  Good for a trade? Perhaps.

Related post:
Raffles Education: Downtrend in force.

FSL Trust: Challenging resistance.

On 27 Sep, I mentioned that "Trading above the gap which was closed at 43.5c now brings the next resistance at 46c to play.  I see an eventual target as defined by the descending 200dMA, currently at 51c."

FSL Trust has been experiencing buoyant price action since then and 43.5c has been established as immediate support.  This is likely to be underpinned by the rising 20dMA. 46c is still the resistance to watch although it was briefly taken out today on higher volume. Eventual target remains defined by the descending 200dMA, currently at 50.5c.

Related post:
FSL Trust: Rising from the depths.

Genting SP: 38.2% Fibo.

On 1 Oct, I mentioned that "I feel that a resumption of a downward movement towards the 50dMA is likely and that further upside could be capped by the 38.2% Fibo line at $2.05."

Today, an effort to further advance the rebound in the last session sputtered as price hit a high of $2.10 only to retreat to close to $2.04, 1c lower than the resistance identified at $2.05. A white candle with a long upper wick was formed, suggesting the presence of strong selling pressure as price tried to move higher.

Immediate support is now at $2.00, underpinned by the rising 20dMA, on top of being a many times tested support and resistance level.  Immediate resistance remains at $2.05.


Related post:
Genting SP: A strong rebound.

Increasing demand for S-REITs.

Morgan Stanley says that S-REITs will benefit from low borrowing costs and a stronger S$. The high dividend yields make S-REITs attractive with limited downside.

Singapore’s high-yield REITs attractive. Yield spreads for REITs will remain high while interest rates are low, meaning cheaper funding costs for the trusts, Morgan Stanley says
Monday, 04 October 2010

© 2010 - The Edge Singapore

Although Morgan Stanley specifically mentioned Mapletree Logistics Trust and Ascott Residence Trust as being upgraded to Overweight, I believe that smaller S-REITs with even higher yields will get some attention soon as well. It is a matter of time and I will be patient.

Today, Saizen REIT saw its 15.5c sell queue bought up to the tune of 6,068 lots. There were three trades which were buy ups of 1,000 lots each. Could this REIT be attracting the interest of some deep pocketed investors?

Incidentally, I have accepted and paid for the rights of AIMS AMP Capital Industrial REIT this evening. I also applied for some excess rights.  Hope I get some. To fellow unitholders, please remember that the deadline is 7 Oct (Thu), 9.30pm for applications by ATM.

Related posts:
Office S-REITs VS Industrial S-REITs.
AIMS AMP Capital Industrial Trust: Rights issue.
Saizen REIT: Better than expected DPU.