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CapitaMalls Asia and NOL: Increased exposure.

Tuesday, April 19, 2011

The STI retreated 19.01 points today to close at 3,125.37. Volume was rather low with only 1,075,913,210 shares worth a total of S$1,329,106,068 changing hands. Low volume on a down day is good news for bulls as it suggests a lack of conviction on the part of sellers. Today, I increased exposure to CapitaMalls Asia and NOL.

CapitaMalls Asia's trading volume reached its highest in 5 days and my buy queue at $1.80 was filled as price touched a low of $1.79. In my last blog post on this stock, I said I would accumulate on weakness but only on further weakness and not $1.83. $1.80 would be a hedge while I would accumulate further if price were to test $1.76.

Could $1.76 be tested in the next couple of days? Possibly since that would be also be a test of the 61.8% Fibo fan line. Momentum oscillators are all declining and could be testing 50% soon for support. Downside could be pretty limited from here. This counter has a compelling story to tell and the dual listing exercise once underway could provide it with some strong upward momentum. In the meantime, the descending 100dMA provides resistance and I could do a contra if price were to go that high in the next two days.

Earlier on, I had thought of NOL as forming a mild uptrending channel. That picture is now changed as a new low was formed today at $1.88. I bought more at $1.89 or 1 bid lower than the support of the range which I have identified as between $1.90 and $2.01. I like how a white spinning top was formed as price declined on reduced volume compared to the session before.

I also like how the MACD has a higher low even as price formed a lower low. Momentum is still encouraging and coupled with the white spinning top, we could have a rebound as the Stochastics seem to have declined into oversold territory too quickly. A retest of the 20dMA at $1.96? Perhaps so and that would be a nice price for a contra.

Related posts:
CapitaMalls Asia: Accumulate on further weakness.
NOL: Going higher?


ortho said...

I am looking to enter NOL or CMA today but it seems that mr market has move upward.. :(

May I know your view on these two stocks? Will you stil be loading more? Thanks ya.

AK71 said...

Hi ortho,

Well, NOL's share price is rangebound. $1.90 to $2.00 is the approximate range. The 20dMA is somewhere in between. So, getting in at the bottom of the range is pretty safe and provides a possible trading gain of about 5%.

I don't know about the long term prospects of NOL though. It formed a lower low on 19 April and that is somewhat bearish. However, things could change. It might need more time.

As for CMA, the longer term downtrend that started 6 Oct 10 is still intact. $1.89 is a many times tested resistance and that could cap gains in the immediate future.

We have to be nimble if we were to trade these counters. Good luck. :)

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