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CDL: A target of $14.31?

Sunday, April 10, 2011

In the weekly email from The EDGE, "CLSA has upgraded City Developments to a buy in a 100-page property report dated Apr 7.... has a target of $14.31 for the stock against ... RNAV (Revised Net Asset Value) estimate of $16.84."

The stock closed at $11.76 in the last session. So, $14.31 is some 22% higher! That is some upside! What did I do? I decided to look at the charts.

It is quite clear that the rebound from 17 March has come to an end and price had been moving sideways the whole week. Resistance is at $11.78 or so and immediate support is around $11.57. Although price is sideway moving, OBV has been creeping higher which is a sign of accumulation. ADX with both +DI and -DI are flat. There isn't any trend per se. However, with +DI above -DI and with the MACD rising in positive territory, there is more reason to be optimistic than not.

Any chance of a pull back? Well, price moved quickly up from a low of $10.18 on 17 March for a gain of 15.5%. This is quite impressive but the MFI and RSI are both bordering on overbought while the stochastics is high in overbought territory.

Price is currently facing resistance provided by the declining 100dMA. Unless this resistance is overcome convincingly, chances are there will be a pull back. A pull back to $11.20 would be more of an ideal price to initiate a long position although I also see a possibility of $11.00 being tested for support in more volatile conditions.


Hubert wee said...

Sold citydev at 11.72 seems that the price is struggling to break 11.80, failing which, 11-11.20 would be a good region to go long again..volume is also unconvincing

AK71 said...

Hi Hubert,

I am also waiting to see if there is a chance to buy in at $11 to $11.20. ;)

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