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CapitaMalls Asia: Directions, please.

Wednesday, September 21, 2011

On 15 August, I mentioned that pre-empting a trend reversal did not work out and I ceased buying more shares of CapitaMalls Asia. Then, I used the rebound later in the month to reduce exposure.

On the daily chart, it is interesting to note that the Bollinger Bands are narrowing once more. This reduction in volatility when interpreted together with a rising 20dMA that is on the verge of forming a golden cross with the 50dMA suggests that price is more likely to rise than fall.


In the event that price should go higher, we could see it testing the declining 100dMA and even the downtrend resistance again. These are currently at $1.44 and $1.57 respectively. Gap resistance at $1.40 and $1.55 would have to be overcome first in these two instances.

What if price were to weaken instead? I would wait to see if the low of $1.13 holds up as support, failing which I would want to see if a higher low forms on the MACD. Looking out for a positive divergence? You guessed it.

8 comments:

FoodieFC said...

Fingers cross it rebound! Just got its dividend today.

AK71 said...

Hi FoodieFC,

What is life without hope, right? ;)

Calvin said...

AK,

What's your rationale for investing in CapitaMalls Asia? I looked at it before but the dividend yield is too low for me.

Calvin
http://www.investinpassiveincome.com

AK71 said...

Hi Calvin,

Although I invest primarily for income at this point in time, I also invest for growth. Investing in CapitaMalls Asia is for growth.

If you search my blog posts on CapitaMalls Asia, you will see how I think this company will do exceptionally well in the years ahead.

You like buying undervalued properties, don't you? What about undervalued stocks? The NAV/unit of CapitaMalls Asia is about $1.50, iirc.

However, I also do Technical Analysis on top of Fundamental Analysis. So, I am predisposed to do some trading along the way.

This counter is not for anyone investing purely for income. ;)

Calvin said...

AK,

I like undervalued stocks with good dividend yields :) I will watch CMA to see if it has any chance of paying more dividends. However, being a developer, they have to invest money into more landbanks, can't see it happening.

Calvin
http://www.investinpassiveincome.com

AK71 said...

Hi Calvin,

Sure, we have our own poisons. ;)

INVS 2.0 said...

Hi AK71,

Narrowing bollinger band means?

AK71 said...

Hi INVS 2.0,

I think Investopedia would do a much better job of explaining this. Haha. Go ahead and visit them. ;)

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