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Cache Logistics Trust: Partial divestment at 98c.

Thursday, September 8, 2011

On 29 August, I blogged about partially divesting my investment in Cache Logistics Trust as the gap was filled at 96c. Today, my overnight sell order at 98c was filled.

After the gap at 97.5c was filled on 1 September, the REIT's unit price seems to be having difficulty clearing 98c, which is a natural candlestick resistance as well.


As the REIT's unit price does not seem to exhibit any form of trend, I look at the Stochastics to catch a glimpse of what is likely to happen next. Stochastics is in the overbought region and this suggests that chances of a pull back is higher than not.

Breaking out of 98c convincingly could see $1 tested next while further downside could see a retest of 91.5c for support. A simple risk and reward consideration suggests that another partial divestment at the current price level is a good idea.

Related post:
Cache Logistics Trust: Gap closed at 96c.

4 comments:

INVS 2.0 said...

Hi AK71,

I catch no balls on the Stochastic indicator. It looks like a pro version of the MACD. :D

I saw two lines in the stochastic. The top line is overbought and the bottom line is underbought? An overbought stock means it has high chance of falling down?

How do we know there is no trend on the price?

Chu Yeow said...

Congrats! I've been eying this one at <95c but didn't get the courage to invest more cash. I reckon selling at this 98c resistance is a great trade.

AK71 said...

Hi Chu Yeow,

What I divested today were those I got at 91.5c back in March.

So, it is very rewarding especially taking into consideration the income distributions received so far. :)

AK71 said...

Hi INVS 2.0,

If you look at the MAs, they are more or less rangebound. There isn't a distinct uptrend or downtrend.

So, I conclude that there is no trend. In such a situation, Stochastics is quite a reliable oscillator.

If the oscillator is above the upper line, the stock is overbought. If the oscillator is below the lower line, the stock is oversold.

However, remember that TA is about probability. A stock can remain overbought or oversold for a long time in some cases. ;)

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