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Capitaland, CapitaMalls Asia and NOL.

Thursday, June 2, 2011

This is going to be a quick blog post as I am feeling somewhat enervated this evening.

Capitaland is causing some people some concern. Is the price going to retreat further after touching a new low of $3.07? I believe questions like this are futile. Nobody knows the answer. TA is about probability after all.

However, we can say that chances of a rebound, if not a reversal, are higher now. With a lower low in price, the MACD spots a higher low. Yes, we have a positive divergence. However, it does not mean that price could not go lower, mind you.


In the event that the positive divergence delivers the goods, look to the declining 50d and 100d MAs for resistance, currently at $3.28 and $3.37 respectively.

CapitaMalls Asia saw volume increasing significantly today with its previous low at $1.57 tested, forming a  black candle in the process. It remains to be seen if $1.57 could hold up as support or, if a lower low were to form, whether the MACD could spot a higher low. Yes, looking out for a positive divergence.


Things look pretty dicey right now.

NOL is yet another counter which is spotting a positive divergence. Lower low in the share price but a higher low in the MACD. However, with such a persistent downtrend and with a narrow trading range, it could take a mammoth effort for share price to break resistance provided by the declining 50dMA in case of a reversal effort.


Let's see if the share price could open and close higher than $1.81 (today's high) in the next session. If successful, we could have a morning star setup, a three stick reversal pattern. That would be promising.

6 comments:

nic said...

Hi Ak!

I share the same views as you too and other technicals like MOM do show stark divergence too. Vested more in some. Hopefully with lesser panic selling things will get better for the whole market!

nic~

AK71 said...

Hi nic,

Thanks for sharing your point of view. Yes, the positive divergences are rather obvious and we can only wait and see how things would turn out. Good luck to us all. :)

kelvintan73 said...

Following my maiden comment on your blog, my biggest holding in my portfolio is CapitaMall Trust which is slightly more than 10% of my portfolio.

I have been thinking of investing in CapitaMalls Asia due to keen interest in One-North, I am from New Creation Church hehe.

The thing is, being so used to REITs, am I correct to say that Capmall Asia is seen more as a growth stock instead?

Any adjustments you think I should make in my mentality when switching from income stocks like Reits to growth stocks?

AK71 said...

Hi Kelvin,

I held some units of CMT a couple of years back as well but I switched out to Suntec REIT. Exact reasons, I cannot remember now.

If your strategy is to invest for income, you could be somewhat disappointed with CMA. I have received two annual dividends so far. The first year was 1c per share and the second year was 2c per share. Nothing to shout about.

I see potential in CMA's future valuation. This is one company that is going to be worth a lot more in future.

This will be largely driven by increasing revenue contribution from its Chinese malls. To some extent, if you believe that the RMB is currently undervalued, there would be forex gains as well. A good dose of patience is required.

Technically, the counter is still in a downtrend. So, a strong stomach is probably required here. Otherwise, wait for the bottom to be established before going long here. Good luck. :)

ortho said...

Hi AK71
Will you be entering more CMA in this downtrend?

AK71 said...

Hi ortho,

CMA's NAV/share is about $1.50. Any further downward movement in price would close the distance and it would be very tempting, fundamentally.

Technically, we want to see the MACD turning up and doing a bullish crossover with the signal line. Currently, the MACD is higher than the last low but it has yet to turn up.

I already added at $1.60 and would not be adding unless price goes closer to the NAV/share and unless the MACD confirms a higher low. Yup, FA + TA. ;)

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