CapitaMalls Asia: Reversal?

CapitaMalls Asia (CMA) is buying Queensbay Mall in Penang. I have been to this mall a few times on cruises to Penang and Phuket. I think it is the nicest mall in Penang: new, spacious, clean and cool. However, everytime I went there, I would wonder how the shops survived. It was also very quiet.

CMA's chart looks similar to that of Raffles Education: a prolonged downtrend with a white candlestick reversal signal as well as higher lows formed on the MFI as it rises from the oversold region.

The descending 20dMA is approximating $1.95 and should provide resistance. In case this were taken out, the descending 50dMA at $2.06 would be the next significant resistance level. In a downtrend, sell at resistance and that is what I would probably do.

Related post:
CapitaMalls Asia: Rebounding from $1.83

CapitaMalls Asia +1.6%; the acquisition of Queensbay Mall in Penang is accretive: JPMorgan. The house adds, the stock is at "an attractive entry level," trading at a 30% discount to SOTP valuation and 1.2x FY10E book.
Wednesday, 22 December 2010

© 2010 - The Edge Singapore

Raffles Education: White hammer.

Bullish reversal candlesticks in this counter's chart have a notorious reputation of lacking follow throughs. So, the reliability of the white hammer formed this session is suspect. Nonetheless, downtrends are rivers of hope and rebounds are not unusual.

The MFI, a measurement of demand, has risen from the oversold region. It has formed a higher low for the second time in the last fortnight. Volume has expanded as price stabilised or rose. This is a sign of underlying demand. Could we see demand improving to push the price higher?

Immediate resistance at 25.5c. Further upside could be limited as resistance is expected at 26.5c, a many times tested support turned resistance, and 27c, where we find the descending 50dMA and the downtrend resistance line.

First REIT: Dragonfly doji at 71c.

The bulllish harami identified on 14 Dec delivered most sportingly as I said then, "It is my personal belief that the 200dMA support at 67c has been recaptured.  Further upward movement in price would find immediate resistance at 68.5c.  This will be followed by 70c and 71c. In due course, if these resistance levels were cleared, the counter could cover the gap at 73.5c. There are some who are still waiting to see how low the price could fall before buying in. Their hands could be forced in the next two days if price continues to be resilient and this would contribute to a further strengthening in price."

First REIT's trading volume has reduced markedly as price rose higher in recent sessions. Today, price closed at 71c, forming a dragonfly doji, suggesting a lack of selling pressure as price rose on relatively low volume.

The OBV formed a sharp V since the formation of the bullish harami candlestick pattern. It has continued rising but more gently so. Accumulation continues. The MACD is poised to form a bullish crossover with the signal line, although in negative territory. Could this upmove in price be just a rebound?

I am of the opinion that it is more a recovery from a deeply oversold condition. Valuation is now moving towards fairer levels. In the days ahead, we could see a gradual rise in price and it could cover the gap at 73.5c. A retest of 75c, the adjusted historical high would be next in line.

Not so long ago, during the days of mad selling down which saw the rights touched a low of 16c and the mother shares touching a low of 66c, what was presented to us was a window period of a few days to load up on the cheap.

Only with strong confidence that comes from knowing the sound fundamentals of the REIT would we dare to buy more and I said as much when asked what would I do then. Friends sent SMS, readers left comments and sent emails. To all, I said we should recognise the window of opportunity, ignore the noise and buy more which I did.

"Am I not worried whether the price would decline further? No. Why should I worry? I cannot do anything to influence the price movement of the REIT. If the market is willing to sell a good thing to me at a lower price, I would buy. It's simple. So, would I buy again if the price declines further. Yes, I would." 13 Dec 10.

I could be sticking my neck out by saying this but congratulations to all who conquered their fears and held their positions. In my opinion, the fair value for First REIT remains at 80c /unit.

Related posts:
First REIT: Quiet confidence.
First REIT: XR and fair value.

FSL Trust: Closing the gap soon?

On 17 Dec, I mentioned that "The MACD is about to cross into positive territory. OBV suggests continuing accumulation. MFI and RSI are both rising, suggesting strengthening demand and buying momentum."

The resistance provided by the 50dMA at 45c was taken out today as price closed at 45.5c. With the MACD rising into positive territory, we could indeed see the gap closed at 46c next. Eventual target remains at 47c.

Related post:
FSL Trust: Testing 45c resistance.

Healthway Medical: Closed the gap at 15.5c.

On 13 Dec, I divested my trading position in Healthway Medical at 17c, saying that "I expected 17c to be a strong resistance as it is where we find the merged 100d and 200d MAs as well as the downtrend resistance line.  So, a trading position entered on 22 Nov last month at 15.5c was divested at 17c today." and on 14 Dec, I mentioned that "Price could first retreat to 16c, a many times tested resistance and now possible support, before closing the gap at 15.5c."

Healthway Medical closed the gap today at 15.5c. Am I expecting more downside? Share price is pulling back from almost overbought conditions and I do not expect any huge downward movement. Notice that the decline in share price has been on the back of reducing volume. This is good news for the bulls. Also notice that the uptrend in the MFI and RSI are still intact. However, the charts suggest the possibility of both indices to retest their supports. This could mean a reduction in price or volume or both in the near future. A successful retest of supports could lead to another upward movement in price.

Immediate support at 15.5c.  This is followed by 15c and 14.5c.

Related post:
Healthway Medical: Still at resistance.

SPH: Breaking the 100dMA.

A reader recently asked me at what price should he buy more shares of SPH? Well, I always like to buy on weakness. Today, SPH closed at $3.90.  This was after breaking the support provided by the 100dMA at $3.95 last Friday.

Although the MACD is in decline, the MFI suggests that there is some support as the counter gets sold down. Of course, this could change quickly.  In such an instance, using Fibo lines, we see the next support at $3.86. However, the 138.2% Fibo line at $3.83 should be a stronger support being one of the three golden ratios. This is followed by $3.81 and $3.79.  I could add to my position then.

CapitaMalls Asia: Rebounding from $1.83.

Last Friday, I mentioned that "A short term positive divergence is what I see with higher lows on the MFI and the RSI as price declined. As price has been pushing the borders of the lower Bollinger and is some distance from the 20dMA, we could expect a brief respite from further downward pressure."

Today, a white candlestick was formed with price rebounding to close at $1.87. The relatively low volume suggests that the mood is still cautious and the rebound could simply be a technical one as the counter was oversold.

There could, however, be more room for price to rise as the MFI and RSI both formed higher lows, enhancing the picture of a positive divergence with price movement. A buy signal has also appeared on the MACD histogram while OBV turned up signalling an end to distribution which has been taking place since 13 Dec.

This counter is still in a downtrend and selling at resistance is the prudent thing in a downtrend. I see immediate resistance at $1.92.  This is followed by $1.95 and $1.97.

Related post:
CapitaMalls Asia: Closed at $1.84.

Golden Agriculture: Pulling back.

In various recent blog posts, I mentioned that the negative divergence between indicators and the price movement of Golden Agriculture is too glaring to be ignored. The charts show clearly rising price against a backdrop of declining volume, MACD, MFI and RSI.

Of course, the MACD is declining in positive territory and the weakness in price could be a chance to accumulate at support. I see support provided by the rising 50dMA which approximates 72c. This is followed by 70c.

Related post:
Golden Agriculture: Waiting for a pullback.

Tea with AK71: Love the plants.

This was taken at a Chinese dessert place at Vivo City. I guess the shop owner must be either a humorous guy or he got quite tired of having to replace the plants! Be kind to plants!

Saizen REIT: Steady.

I have not been doing much TA on Saizen REIT and some readers are worried. OK, let me do an update.

Saizen REIT has settled into a tight trading range. All the daily MAs are within close proximity of each other. The technicals are benign. MFI is forming higher lows and higher highs. OBV shows some accumulation.

Look at the weekly chart and the picture is more exciting. 20wMA has flatlined. The 50wMA continues to rise which reduces the capping pressure on upward price movement. The 100wMA continues to rise strongly and this limits further downside and could also provide a push to the unit price.

The MACD is poised to cross over into positive territory. The higher lows on the MFI are equally obvious on the weekly chart. All technicals point to an improvement in longer term sentiments.

Things could only get better in time.

Here is a link contributed by a reader, DP:
Japanese property market on the rise.
Click on Listen:Windows Media for a radio broadcast which we could listen to as well.

Related post:
Saizen REIT: Insider buying continues.

FSL Trust: Testing 45c resistance.

FSL Trust is rising on pretty modest volume. It closed at 45c which is the resistance provided by the 50dMA today. Could it move higher?

I suggested that the counter could close the gap at 46c which could indeed happen. The Bollinger Bands are beginning to widen after squeezing tighter and tighter in the recent past. This usually hints of a break from a tight trading range and could have some momentum.

The MACD is about to cross into positive territory. OBV suggests continuing accumulation. MFI and RSI are both rising, suggesting strengthening demand and buying momentum. If this keeps up, we could see the declining 200dMA, currently at 47c, as the eventual target. Immediate support is at 44c.

Related post:
FSL Trust: Higher volume and testing resistance.

CapitaMalls Asia: Closed at $1.84.

The support identified at $1.85 was broken yesterday but recaptured. Today, price closed at $1.84. Do we hit the panic button, sell and run for the hills?

The black candlestick formed today was on the back of lower volume, less than half of yesterday's volume. Selling pressure is still around as suggested by the long upper wick of the candle. However, with price closing only 1c lower, it suggests that the bulls are putting up a fight here. The bears are not as strong as yesterday but still have the upper hand.

A short term positive divergence is what I see with higher lows on the MFI and the RSI as price declined. As price has been pushing the borders of the lower Bollinger and is some distance from the 20dMA, we could expect a brief respite from further downward pressure.

Connecting the highs of 10 Nov and 13 Dec gives us a steeper downtrend resistance line. This is where the declining 20dMA approximates. I expect some resistance at $1.95 in case of a rebound.

Related post:
CapitaMalls Asia: Bought some at $1.85.

Cache Logistics Trust: Still on my watchlist.

I hardly talk about Cache Logistics Trust but regular readers would know that this is on my watchlist. With an annualised DPU of 7.76c, at today's closing price of 94c, the distribution yield would be 8.26%. Still not attractive enough for me but I recognise its strong numbers which would convince me to start a small long position if price would decline to test its historical low of 91.5c for a yield of 8.48%.

Here are the numbers as at 30 Sep 10:
Gearing: 23.4%.
NAV/unit: 88c.
Interest cover: 9.2x.
Portfolio 100% leased.
WALE: 5.8 years.

Substantial institutional shareholders:
JPMorgan Chase   9%
Morgan Stanley     7%
The Capital Group 6%
Amundi                 7%

How likely is it for the Trust to retest 91.5c? Since 22 Sep, the OBV has been in decline, though bumpy. This suggests that there is gradual distribution going on. The MACD has also been on a decline. Volume is, however, very thin. Price could be quite volatile.

Anyway, if I get some units here, it is a move to diversify my portfolio but it is not absolutely necessary. If the price does not decline to the level I feel comfortable with, I would give it a miss.

See 3Q 2010 slides here.

Related post:
Cache Logistics Trust: Low gearing.

First REIT: Quiet confidence.

First REIT experienced much lower trading volume today. The frantic selling of nil-paid rights was noticeably absent today.

Well, today is the last day of trading for the nil-paid rights. Without the option of an arbitrage, investors interested in First REIT would only have the option of buying the mother units from now on. I expect this to return greater stability to First REIT's unit price which could turn buoyant in the near future.

Immediate support at 68.5c, as provided by the 100dMA.  Immediate resistance at 70c, as provided by the 50dMA.

Related post:
First REIT: A bullish harami.

Golden Agriculture: Waiting for a pullback.

I have been saying to stay cautious on Golden Agriculture for quite some time now. Am I going to change my tune? Unfortunately, it is more of the same. Waiting for a pullback before loading up would be the prudent thing to do.

The negative divergences are too glaring for comfort. The MACD and MFI are both forming lower highs as the price formed higher highs. Trading volume has also been declining as price rose.

I will bide my time.

CapitaMalls Asia: Bought some at $1.85.

Just last night, I said "With all the momentum oscillators forming lower highs and the OBV showing obvious distribution, going long on this counter now would be most risky. Any upmove could simply be a rebound from oversold conditions and would find immediate resistance at $2, a recently many times tested resistance level and it is also where we find the declining 20dMA. I have my eyes on $1.88 and $1.85 as possible fair entry prices."

Well, my overnight BUY queue at $1.85 was filled. What is my plan now? Well, prices don't go down in a straight line. If there is a rebound, I expect resistance at $2.00 and that is where I would divest for a trade. The likelihood of this happening in the next few weeks is not at all remote.  Look at the MFI, it seems to be forming higher lows. There is still some underlying demand for this counter's stocks, it would seem.

However, looking at how the volume expanded dramatically today, almost tripling compared to yesterday, we cannot help but wonder if price could weaken further. Using two sets of Fibo lines, the first using $1.91 as the extreme low and the second using $1.84 as the extreme low, we see $1.65 showing up as 161.8% Fibo line in the former and 138.2% Fibo line in the latter.  That is the ultimate strong support in case of a continuing sell down with heavy volume. That's a fair bit to fall from $1.85 and I will have my warchest ready.

Related post:
CapitaMalls Asia: Testing historical low.

CapitaMalls Asia: Testing historical low.

On 9 Dec, I mentioned: "Closing at $1.92 is at support provided by the 138.2% Fibo.  38.2%, being one of the 3 golden ratios, is quite strong and if it breaks, the other 2 golden ratios are 50% and 61.8%.  The 150% Fibo and 161.8% Fibo lines are at $1.88 and $1.85 respectively. If the selling pressure keeps up, we could see prices go to those levels. Then, I would be sorely tempted."

Price formed a wickless black candle as it tested the counter's historical low at $1.91. The difference? On 7 May, when $1.91 was touched, a white candle was formed. It looked like a white spinning top with a long body which was a potential reversal signal and it delivered. This time round, a wickless black candle was formed as price closed at $1.91. The picture is more bearish now, for sure.

With all the momentum oscillators forming lower highs and the OBV showing obvious distribution, going long on this counter now would be most risky. Any upmove could simply be a rebound from oversold conditions and would find immediate resistance at $2, a recently many times tested resistance level and it is also where we find the declining 20dMA. I have my eyes on $1.88 and $1.85 as possible fair entry prices.