China Hongxing: Eyeing 20c.

One blog post for the road. :)

I have not had much luck with China Hongxing, having lost some money trading this counter twice in the last few months. I am no longer vested and it seems that things are looking up for this counter. In the last session, China Hongxing broke resistance at 17.5c. This was after closing above the 17c neckline of what is now clearly a double bottom formation on 4 January.

The OBV shows gradual accumulation while the momentum oscillators are all rising. The MACD is rising in positive territory, indicating the return of positive momentum. A higher low on the MFI as it continues to rise suggests firm demand although the RSI has risen into overbought territory. Continuing upmove in price with higher volume could see it test resistance at 20c eventually while 17.5 is immediate support in case of a pull back. Good luck to all who are vested.

First REIT: Retesting high at 75c.

Today, First REIT hit a high of 75.5c before retreating to 75c, the high achieved on 2 and 3 Dec 10, adjusted for the recent rights issue. OBV shows ongoing accumulation while the MFI shows firm demand. The RSI has entered overbought territory but in very sanguine circumstances, it could stay overbought for a while more.

71c was a many times tested resistance which should turn strong support. It is also where we find the 50d and 20d MAs approximating. The 20dMA is also poised to form a golden cross with the 50dMA at this price level. Anyone who bought more units of First REIT, confident of its sound fundamentals during its recent troubled rights issue is now amply rewarded.

Could this REIT's unit price go higher? Your guess is as good as mine but you might remember that I have a fair value estimate of 80c per unit for this REIT. Apparently, OCBC Research thinks it is worth much more with a fair value of 84c per unit. The listed positives are:

1. Good quality assets.

2. Strong and committed sponsor.

3. Steady and sustainable income.

4. Potential upside.

Read the report at http://www.remisiers.org/cms_images/First_REIT-110107-OIR.pdf

Related post:
First REIT: Excess rights not enough.

Raffles Education: Resistance at 200dMA.

Raffles Education extended gains yesterday and closed at 30c, the resistance provided by the 200dMA. A wickless white candle was formed on the back of increased volume. OBV rose steeply, signalling accumulation. MACD rose into positive territory, signalling the return of positive momentum.

MFI and RSI rose higher, crossing into overbought territories. Although signalling heightened demand and positive buying momentum, the indices, being in overbought regions, suggested that further gains could be limited. This panned out today.

A doji was formed today, suggesting indecision. Although the momentum oscillators continue to rise, the OBV has flattened, signalling a stop to accumulation. The explosive rise in price could be at an end. Pull back could find support at 27.5c and 26.5c, as provided by the 100d and 50d MAs, respectively.

Related post:
Raffles Education: Sold at 27.5c resistance.

Raffles Education +5.5%; buybacks give confidence - Kim Eng
Thursday, 06 January 2011

© 2011 - The Edge Singapore

FSL Trust: Sold some at 48c.

Yesterday, I reduced my long position in FSL Trust at 48c, locking in some gains. You might remember that I sold some on 30 Dec at 47c. Then, I mentioned that "In a benign situation, I expect gap resistance at 46c to become support in the near term. This is further strengthened by the uptrend support line. Technically, the worst seems to be over for FSL Trust and a retest of resistance at 48.5c looks likely in time." 48c is just one bid away from 48.5c and selling some at 48c is a hedge in case price weakens.

A doji was formed yesterday, suggesting indecision, while the uptrending MFI broke its support when it emerged from the overbought territory a day earlier. Encouraging though some technicals might be with the MACD continuing to rise and the OBV showing no signs of distribution, the RSI was way overbought.

My long position in FSL is for a trade and the entry was not based on fundamentals, which are lacking. So, reducing my long position, locking in gains at resistance and at signs of weakening demand, at least partially, is prudent although it could limit gains in case of further price appreciation.

Today, 48c remains the resistance as a gravestone doji was formed. The stalemate between bulls and bears is obvious but it seems as if the bulls are tiring. Further upside seems difficult and could be limited to a retest of the high of 48.5c touched on 21 Oct 10. A pull back would see immediate support at 46c which is also where the 20dMA is rising to form a golden cross with the declining 200dMA.

Related post:
FSL Trust: Sold some at 47c.

What are the charts forecasting for 2011?

When I initially started out on Technical Analysis, I would see how seasoned chartists like Michael Kahn, Goola Warden and Daryl Guppy read the charts. So, I am excited that Daryl Guppy will be sharing his views on the stock market outlook for Singapore investors in 2011 very soon.

Daryl Guppy is a regular commentator on CNBC Asia and is known as 'The Chartman'. He is recognized globally for the quality of his analysis. He actively trades equities and associated derivatives markets. Daryl has also developed several leading technical indicators used by traders, and is recognized as an expert on China markets.

We can also learn how to use SiMSCI warrants to take a leveraged view on the Singapore market without the need to stock pick.

Register today at 
http://www.warrants.com.sg/en/seminar/seminar_e.cgi

More on SiMSCI warrants at
http://singaporeanstocksinvestor.blogspot.com/2010/11/best-way-to-trade-singapore-index.html

ADVERTORIAL

AIMS AMP Capital Industrial REIT: Firm support.

The last time I blogged about this REIT was on 29 Dec and I mentioned the rising MACD. This is still valid today. The MACD is rising gently and seems on the verge of crossing into positive territory. With the longer term 100d and 200d MAs both rising, it would seem to be a matter of time before the resistance at the 50dMA is taken out. This is at 22c.

The MFI has been forming higher lows and would be testing 50% once more. If it overcomes this, it would mean an expansion in volume at the current price of 22c or higher. This is one counter that has very limited downside and a nice probability of trading to 25c (for an 8% yield). In the meantime, at 22c, its distribution yield is about 9.1%. I am accumulating.

Related post:
AIMS AMP Capital Industrial REIT: Rising MACD.

Raffles Education: Sold at 27.5c resistance.

On Monday, 3 Jan 2011, I mentioned "Raffles Education is rebounding in earnest. The MACD broke out of its downtrend and is rising while the MFI and RSI show positive momentum. OBV shows accumulation. Immediate resistance at 26c.  This is followed by 26.5 which is where we find the declining 50dMA. The most formidable resistance is probably provided by the 100dMA which is at 27.5c. The last time price tested the 100dMA was on 21 Sep 2010. For anyone looking to reduce exposure, selling at resistance in a downtrend is conventional wisdom."

Today, Raffles Education broke out of its downtrend which coincides with the declining 50dMA at 26.5c. This was on the back of higher volume. Closing at 27.5c is at resistance provided by the declining 100dMA. An intra day high of 28c was achieved, however, and if volume continues to expand with an upward push in price, the next significant resistance level is at 30c, which is where we find the declining 200dMA.

Could I have been too hasty in selling off my money losing position initiated a couple of months ago? I do not know but I recognise that, downtrend notwithstanding, the 100dMA has been the limit of any rebound the counter has staged for the last 12 months. Could it be different this time? Of course, it could be but this being purely a trade, I chose to follow conventional wisdom.

Tea with AK71: Uncles fight on SBS bus.

I thought this only happens in Hong Kong.



I think I have taken the same bus service from Orchard Road to Chinatown before. I remember that the bus was mostly filled with senior citizens. I would never have thought such a scene probable.  Really, I mean these are not teenagers from 369, right? Does SBS have a service number 369?

NOL: Full steam ahead.

NOL tested its high of $2.35 touched in April 2010. The difference is that in April, it was a black candle and in the last session, it was a white candle. I like what I see in the OBV. It has been placid since early November 2010 as price went on to form two dips. No visible distribution. The weaker holders were being shaken out.

Taking the lows of $2.02 and $2.12, using $2.24 as the neckline gives me two targets at $2.36 and $2.46. $2.35 is only 1c shy of $2.36. I expect $2.46 to be attainable if volume continues to expand on upmoves. Having said this, price climbs a wall of worries and the MFI and RSI are bordering on overbought. It would make sense to divest partially and take some profit at resistance. Good luck to all NOL shareholders.

Credit Suisse rates Asia container shipping sector Overweight; Likes NOL
Tuesday, 04 January 2011

© 2011 - The Edge Singapore

CapitaMalls Asia: Eyeing $1.83.

As mentioned in my last post, I am keeping an eye on CapitaMalls Asia. Price formed a wickless black candle today as it closed at $1.87 on higher volume. Support was established at $1.83 and it would be interesting to see if this would be tested in the next couple of sessions. If tested on lower volume, it could possibly signal the formation of a bottom.

Coupled with a lower volume, we want to see the MACD forming a higher low and the MFI keeping above its trendline support. We would then have the ingredients for a possible reversal. As of now, the downtrend is still intact and if downward movement in price continues with higher volume, things could turn ugly.

CapitaMalls may spend $2b  on new projects this year
Tuesday, 04 January 2011

© 2011 - The Edge Singapore

Capricorn effect, Golden Agriculture, CapitaMalls Asia, Raffles Education and Saizen REIT.

The mountain trekking herbivore did not disappoint as it showed its presence today, sending the STI up by 1.4%. Stock markets in Europe are also higher. "The biggest Asian markets closed higher, as investor confidence was boosted by signs that China's efforts at keeping a lid on inflation may be working....Hong Kong's Hang Seng index rose 400.60 points, or 1.7 percent, to close at 23,436.05, while the South Korean Kospi rose 19.08 points, or 0.9 percent, to finish at 2,070.80." Read article here.

Golden Agriculture moved higher to close at 82c today. Volume although higher is still quite modest. Nonetheless, the bullish crossover on the MACD, breaking out of its downtrend, is encouraging.  The OBV shows continual accumulation while the RSI shows positive momentum.  The MFI, however, has declined below 50%.  MFI is a function of price and volume and the decline reinforces the picture of negative divergence. Support for Golden Agriculture is now a band between 78c to 80c.

CapitaMalls Asia retreated from $1.95 where we find the downtrend resistance line. The counter's downtrend is intact. At the closing price of $1.91, it is supported by the 20dMA. If the support at the 20dMA were to be compromised, the low of $1.83 would be critical as a measure of whether the counter could reverse from its downtrend or go lower. I would keep an eye on the MFI. With a reduction in price and/or volume, the MFI could retest its support.

Raffles Education is rebounding in earnest. The MACD broke out of its downtrend and is rising while the MFI and RSI show positive momentum. OBV shows accumulation. Immediate resistance at 26c.  This is followed by 26.5 which is where we find the declining 50dMA. The most formidable resistance is probably provided by the 100dMA which is at 27.5c. The last time price tested the 100dMA was on 21 Sep 2010. For anyone looking to reduce exposure, selling at resistance in a downtrend is conventional wisdom.

Saizen REIT saw some buying up activity today. Volume achieved was the highest in 3 months on a white candle day. The MACD shows that momentum is positive and improving. OBV shows gradual accumulation. Immediate resistance is at 17c while 17.5c is the top of a basing process that started in April 2010. We could experience strong resistance at 17.5c if ever tested. With the next distribution in March 2011 and probable positive catalyst from the refinancing of YK Shintoku, there is more upside potential for this REIT.

STI rises 1.4% to 3,235.77 at closing.

First Real Estate Investment Trust jumped 2.1% to 72 cents, a four-week high. Singapore’s first health-care property trust said it completed the purchase of two Indonesian medical centers, boosting assets under management to $612.8 million. It said it’s aiming for a $1 billion portfolio in two to three years.

Monday, 03 January 2011

© 2011 - The Edge Singapore