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Well, I have to admit that a blog is different. It is not just a private diary for me and me only. I am sharing ideas with people on a public platform and it is only plain courtesy to make it friendlier to navigate and to find things. Oh my, I have been lacking in plain courtesy before. My apologies.
I did the mini facelift last night, rather late last night. Yawn. The major changes happened on the right sidebars. I have taken away most of the slimmer right sidebar boxes and moved them up to become wider and, I guess, easier to read boxes. I have also further broken down the blog posts under the old "Recommended" and "My strategies" headings which were boxes I threw quite a few blog posts under and didn't give them much thought. I know, yah, "Recommended" and "My Strategies" sound so helpful, right? Nah.
The left sidebar has the same components as before except that I shifted their positions. I shifted the box which encourages readers to share ASSI right to the top while aggregating all the ways in which readers could stay in touch with ASSI under a single heading. The two headings are "Sharing my blog" and "Staying in touch". I know, pretty original, isn't it? Haha.. I also included a nifty widget from Twitter. This is just another way in which readers could stay in touch with ASSI.
Also, after 24 hours of removing all the ad spaces for AdSense or Ads by Google in ASSI, I am hazarding a guess that all readers would have read my blog post from yesterday on how I was removing the ad spaces temporarily. It was a self imposed ban, so to speak. Now, I am serving Ads by Google again.
If you have any comments at all regarding what I have done with my blog, please feel free to let me know. Have a great week ahead. :)
Removing AdSense from ASSI for now.
A friend sent me a SMS to say he bought some at $1.96 (the IPO price) in the morning and it closed at $1.93 for lunch. Then, it went on to touch $1.88 when another friend who was in the queue got his buy order filled. GLP closed at $1.93 in the end.
Is this stock going to rebound or would it decline further? After a huge sell-off, it is reasonable to expect a rebound. Short sellers would want to cover their short positions if the bulls are emboldened to push the price higher for some reason. However, the truth is no one knows what would happen next week.
TA is useful in that it lets us know where are the supports and resistance and we have to plan accordingly. TA simply gives us a glimpse into what could be and there are always two sides to a coin. Of course, sometimes, it is nifty enough to give us probabilities as well but they remain probabilities and never certainties.
What is the chart for GLP saying?
What is obvious is that GLP has been in a worsening downtrend since 1 Nov 2010. Look at the three orange lines I have drawn and you would realise this. The latest trendline resistance is rather steep and approximates the declining 20dMA. $2.06 thereabouts. Selling at resistance in a downtrend is a sound strategy.
The immediate support is at $1.88. If this were to break in the next session, we won't know where is the next floor although employing Fibo lines could give us a clue. $1.82, anyone? The technicals are weak and so is my heart. I shall abstain.
Friday, 11 February 2011
What's my take on MIT and GLP?
Regular readers would know what I think of Healthway Medical's current fundamentals. I am still waiting for their latest results. It should be made available sometime this month. Well, fundamentals aside, could the counter be ripe for another trade?
A dragonfly doji was formed in the last session as price touched a low of 14.5c which is a many times tested support in November last year. It should be a rather strong support but could it break? Why not? However, notice how volume has been declining over time. There is less activity here as time goes by. Most of the sellers have probably sold and we have some stoic long holders now. Look at the OBV and we realise that it is mostly flat. The MFI seems to be forming higher lows which suggests some underlying support.
Looking for clues regarding the longer term trend, I brought up the weekly chart and we see the 100wMA rising and approximating 14c. It is also interesting to see the weekly MFI actually forming a higher high which suggests strengthening demand even as price weakened. The Bollinger bands are narrowing. Could price swing higher or go lower? A punt at 14c? Perhaps.
Healthway Medical: To buy or not to buy?
You might or might not notice that I have removed all the ad space for AdSense or Ads by Google from this blog. This is because I have noticed multiple clicks on these ads from possibly the same source for several days now.
I understand from other bloggers that Google is quite strict in policing and weeding out fraud. Having multiple clicks within 1 minute from possibly a single IP address could quite possibly be classified as fraud. This could result in my AdSense account being terminated by Google.
Why am I taking action only now? I was wondering if it was an aberration but it seems to be an established pattern now. If it is apparent to an IT dinosaur like me, it would not escape an IT giant like Google. So, I am suspending all ad space for AdSense or Ads by Google on this blog for the time being.
If you guys are worried about a loss of income for ASSI, just visit my other sponsors, Ads by Nuffnang. Also, give my ZUJI banners a chance if you are planning to travel and I would get a small commission if you find a good deal.
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The donate button is on the left sidebar and looks like this:
Thank you and have a great weekend. :-)
I remember how this REIT suffered from weakness in price before it went CD and some who got their buy queues filled at 21.5c were worried instead of happy. I guess they should be happy now since they would be receiving the income distribution of 0.51c per unit on 15 March and saw how the REIT's unit price held firm in a sea of red as stocks were sold down this week. I am happy too. Unless there are definite signs from the technicals that things have turned bearish, buying more on weakness cannot be too far wrong.
Read: AIMS AMP Capital Industrial REIT: Worried?
This REIT broke its immediate support at 75c decisively today and on higher volume. Hitting a low of 73.5c before closing at 74c, we could see its price weaken further as the MFI looks set to form a lower low. Looking at the weekly chart, the longer term uptrend is intact but the rising 20wMA is approximating 72c and if selling pressure were to intensify, we could see 72c tested eventually.
First REIT: Testing immediate support.
Is the bear losing strength or just taking a breather? It could be interpreted as the bulls are getting stronger or the short sellers are simply covering their positions. Whatever the case may be, closing lower by 5c at $3.34 after touching a low of $3.30 means that the bears have again emerged the victors.
Volume is, once again, very high although it has been in decline for three sessions in a row. Selling is still very much alive. Notice how the distance between the declining MACD and the signal line has widened. The MACD now approximates the low of 1 Dec 10. It does not seem likely that a higher low would form. The OBV suggests a continuation of intense distribution while the MFI and RSI are both deeper in oversold territories.
However, unless the low of July 2009 at $3.28 breaks, there is little incentive for short sellers to continue selling down the stock. For people who are thinking of cutting losses, the time for cutting losses could have come and gone. Remember that prices move down a river of hope. Cut loss when there is a rebound, not when price is testing supports.
Is AK71, therefore, hinting that the downward movement could be near its end? No, he is just wondering aloud which is something he is prone to do.
Capitaland: Time to buy more?
That volume expanded relative to the session before on a black candle day is somewhat bearish. A black candle without any lower shadow is also quite bearish and we could see the price going lower. The MACD also looks like it is poised for a bearish crossover with the signal line.
However, as the uptrend is still intact, there is no need to get hysterical. If price were to go lower, what would I do? Get hysterical? Perhaps not but I would be cautious and not load up further unless there are clearer signs that supports would hold up.
Next support? $1.88. This is quite obvious from the candlesticks and also a gentler trendline support using the lows of 20 Dec 2010 and 1 Feb 2011. After that, it is $1.85, followed by $1.83.
CapitaMalls Asia: Low volume pull back.
This is 0.08c lower than my estimate on 11 Nov which was for 0.6c. A lower DPU is not pleasing but it is not catastrophic. Some people recognise this as 1,000 lots each were bought up at 17c/unit in two transactions at 3.29pm and 4.50pm and the counter closed unchanged.
On 11 Nov 10, I said that "Everything else remaining constant, I estimate the distributable income for 2Q FY2011 to be JPY 220,000,000 or 7.4% higher than 1Q FY2011. Total distributable income for 1H FY2011 is, therefore, estimated to be JPY 424,943,000. Number of units in issue now at 1,111,003,000. DPU estimated at JPY 0.38. Based on the rate of S$1 = JPY63.3, it means a DPU of 0.6c in March 2011."
Of course, everything else did not remain constant and total distributable income for 1H FY2011 is JPY383,858,000 or some 10% lower than my estimate back in November last year. Number of units in issue at 31 Dec 10 was 1,122,925,619 or almost 12,000 lots more, as warrants were exercised. As of 10 Feb 11, there were 1,125,615,406 units in issue. The S$ has also strengthened against the JPY in the last three months. These three factors contributed to a lower than expected DPU.
The lower distributable income is "due mainly to the sale of a total of 12 properties between September 2010 and November 2010. The average occupancy rate was 90.8% in 2Q FY2011, as compared to ... 90.9% in the previous quarter ended 30 September 2010 (“1Q FY2011”). Overall rental reversion of new contracts entered into in 2Q FY2011 was marginally lower by about 3.2% (... 1Q FY2011: lower by about ... 3.2% ...) from previous contracted rates. "
See announcement here.
Saizen REIT: 1Q FY2011 results.
On 4 February, I suggested that "Caution is advised. There could possibly be a better time to buy more."
I also said that "On the daily chart, right away, we see that the Bollinger Bands are squeezing. An imminent change in direction after a period of low volatility? Which way would it go? The MACD has been falling as a bearish crossover was completed sessions ago. Momentum is weakening. Immediate support is at 75c."
Today, First REIT's unit price declined to test immediate support at 75c. Volume increased perceptibly as price managed to close unchanged at 75.5c. The technicals are bearish and we see that the MFI's downtrend is very much intact, suggesting a declining momentum in demand.
First REIT: Buying more?
Unfortunately, the bulls have turned cautious and the bears bolder. The black candle formed today is long and most ugly. The MACD histogram has turned red which is a sell signal. Time to panic? Well, maybe later but definitely not now.
Notice how much lower the volume is on a day when price declined so much. What does this tell us? There is a lack of buyers. The downward movement in price is due to a lack of buying and not because of massive selling. So? Weak holders are being shaken out. Let's see if the golden cross formed by the 20d and 50dMA would provide a strong support in limiting further downside. This is at $1.92.
Having offloaded most of my long position at $2.00, I might pick up some at supports.
CapitaMalls Asia: Pushing it higher.
The negative divergence between higher price and lowering MACD is quite obvious for the period of June 09 to Oct 09 and perhaps even Jan 10. No more higher highs since Jan 10. That was, perhaps, an early warning signal.
A reader asked me if it was time for her to buy more Capitaland shares last evening. I told her I expect more downside today. In confirmation, the low of May 10 at $3.46 was taken out today without any hesitation by Mr. Market. The formation of three black crows now suggests that price could go lower. Some would say that it is more accurately described as two and a half black crows but I am sure the distinction is just academic.
The next low to look at is $3.28 of July 09 and another reader today asked if it is time now to buy some especially if that low were tested. It would take someone very brave to buy in the current conditions, I feel. Could we see $3.28 taken out without hesitation by Mr. Market just like $3.46 was taken out today? Why not?
Isn't there any silver lining? Well, the MFI and RSI have declined into oversold territories. What does this tell us? That the counter is becoming oversold. Nothing more. Doesn't it tell us that the counter could see a rebound soon? No, it tells us that the counter could see a rebound in time but not when. Remember that in very bearish conditions, these indices could stay in oversold regions for a long time.
For people who are dead set on buying some Capitaland shares now, selling if the price rebounds would be a sound strategy. When to sell? At resistance, of course. Each time price rises to test resistance, sellers would come in to sell down the stock. Unless there is a dramatic change in sentiment, this fact is unlikely to change. Connecting the highs of 14 Oct 10 and 6 Jan 11 yields a trendline resistance. This shows a downtrend and where the resistance levels could be if there should be a rebound in time.
What would I do? I would wait for the fire to go out. I don't enjoy the prospect of being burnt. Three black crows (or two and a half) are nothing to fool around with for long holders. So, what am I waiting for? A sign. If the MACD forms a higher low soon, we could be seeing a positive divergence in the making and that is when I might tiptoe into the stock.
Good luck to all who are vested.
On 18 November 2010, I sounded an alarm, "The negative divergence between price and the MACD is playing out. With the MACD approaching zero, momentum could quickly turn negative as the lower highs on the RSI suggest weakening buying momentum. If price does not recapture the 50dMA as support, immediate support is at $2 with the next support after that at $1.85."
Also, in my various blog posts regarding Genting SP in the last few months, I kept hinting of further downward movement and I kept mentioning $1.85 as a likely downside target. Is this really going to happen? No one can say for sure but the downward bias is quite obvious.
For anyone who has long position using leverage of some form, this could be a worrisome scenario. A fall from the current $2.07 to $1.85 is a 10% decline. Quite substantial. For those who are vested at higher prices, it could be doubly worse.
These are the support levels to watch:
$2.04 - Short term candlestick support.
$2.00 - Low of 31 January 2011.
$1.92 - Low of 24 November 2010.
$1.85 - Likely downside target.
Remember that these are the supports which I have identified. It does not mean that they would definitely be tested. The question to ask is what would you do if these supports held up or if they were breached?
If you believe the analysis by AmFraser (appended at the end of this blog post) that the uptrend is intact, buying at supports in an uptrend is the way to go. If we look at where the 200dEMA is, the uptrend is intact. However, the 200dEMA is a long term MA. So, we should say that the longer term uptrend is intact but the fall to that long term MA is quite a distance.
Genting SP: Bearish engulfing candle.
The counter's share price briefly went above resistance identified at $2.04 to touch $2.05. Closing at $2.01 shows that resistance at $2.00 has been overcome and could turn support. This needs confirmation although volume expanded further too as price moved a tad higher.
Note that the very long upper wick of the candle shows intense selling pressure higher up. If there is follow through in the next two sessions, we could very well see $2.08 or even $2.10 tested although things are looking somewhat stretched. Note also that the MFI is now testing 50% which functions as resistance in such an instance sometimes. I would divest again if price should rise to test $2.08 and $2.10.
CapitaMalls Asia: Partial divestment at resistance.
Wednesday, 09 February 2011
On 31 January, I mentioned "For anyone who wants to go long on this counter, being patient and waiting to buy some at supports in an uptrend is a good idea. I never like chasing. I rather like waiting for things to come to me."
The upgrade by Kim Eng might have given the share price of the counter a shot in the arm as a white candle was formed that very day. However, price action has turned bearish since, especially with China's move to up interest rates which could lead to a lower investment demand for real estate in the country.
Read blog post on China's interest rate hike here.
Technically, the massive black candlesticks in the last two sessions were on the back of heavier volumes. The MACD has formed a lower high and is declining under the signal line. A correction is clearly underway. OBV shows that distribution is ongoing while the MFI shows a decline in demand with a lower high.
Looking at the weekly chart, it becomes clearer why Raffles Education's share price is having a hard time clearing 32c. That is where we find the 50wEMA. If we connect the lows from the week of 20 Dec, we get a trendline support which intersects the 20wMA at 28c. This is where strong support could be found if support at 30c should break.
The OBV shows that distribution has been going on since the week of 17 Jan while the MFI continues rising, indicating positive momentum in demand. While there is distribution, longer term demand is still positive. Buying at supports instead of chasing a rising share price is sound advice.
Raffles Education: Correction?
Personally, I do not think this would work. I think guys would more likely watch the program to ogle the lady in the transparent apron! Who are they kidding? Guys would go to adult channels because they are looking for a specific something and not learn how to cook! Anyway, have a read:
Oh, in case you guys are wondering, this is happening in Hong Kong. No such luck in Singapore. ;)
Read full article here.
Just last evening, I said "Connecting the highs of 3 and 17 January gives us a trendline resistance. We could see $2.00 tested next if the bouyant price action follows through. It also remains to be seen if $1.93 is resistance turned support. I am monitoring this counter as I get ready to divest some." My sell queue for CMA was filled today at $2.00 as price went on to touch a high of $2.02 before closing at $2.00, right smack on resistance. Volume also expanded nicely.
The fact that price closed at $2.00 after touching a high of $2.02 hints at some selling pressure above $2.00. Next resistance levels are at $2.04, as provided by the 100dMA, and $2.08, as provided by the 200dMA. Could we see these levels tested in the next couple of sessions?
The 20dMA continues to rise and seems on track to forming a golden cross with the 50dMA. The MACD has risen into positive territory, heralding the return of positive momentum in the meantime. OBV keeps rising, suggesting more accumulation. RSI is rising after testing 50% as support several times, suggesting that there is support for the positive price action.
However, look at the MFI and this hints of something slightly ominous. It has been forming lower highs and even broke the trendline support. It is telling us to be cautious. This forms a negative divergence with the recent rising price. So, it is likely that this current strength we are seeing could peter out.
Let's zoom out and look at a longer term daily chart. If we connect the highs of 11 Dec 09 and 6 Oct 10, it is easy to see that the longer term downtrend is still intact. Where is this trendline resistance now? $2.14. This does not mean that price would hit $2.14 anytime soon, does it? As price would climb a wall of worries usually, $2.04 and $2.08 could be rather strong resistance levels. Over time, the longer term trendline resistance would not be at $2.14 anymore and would be lower. So, what would I do? Selling at resistance in a downtrend is what I would do.
I was asked why I am not holding for the long term if I think the fundamentals are strong. Well, fundamentals are different from sentiments. Let us look at the weekly chart which is sufficiently long term for me. It becomes clear why price hit $2.02 and retreated today. $2.02 is where we find the declining 20wMA. If this resistance were cleared, we could see price touching a high of $2.10 which is where we find the declining 50wMA. We have 3 more sessions in the week to see if this would happen.
In the longer term, the MFI and RSI have both risen out of their oversold regions and are forming higher highs. The MACD is making a bullish crossover with the signal line although in negative territory which suggests that given a longer time frame, this could just be another rebound in a downtrend. Watch those resistance levels identified.
What about buying? Would I buy more? $1.83 is a twice tested support and should be strong if retested. This counter might see some volatility yet but it could have possibly found a floor, if not the bottom.
CapitaMalls Asia: Improving technicals.
Friends are constantly amazed by how little money I could spend on food. Well, if we cook our own meals, we could save quite a bit of money and we could have a healthy meal for even less money. I think the idea that many people in affluent countries like Singapore eating too much rich food is quite true.
Let me share with you one of my favourite low cost and healthy meals: barley and winter melon. This is really a meal that kills two birds with one stone. Very rare.
You know how much money those packet drinks cost? Lemon Barley drink from Yeo's cost $2.40 for six 250ml packets, if I remember correctly. I feel that the drink is not even nice. Tastes like syrup.
Put about a tea cup worth of barley in a pot and wash clean. Fill the pot with water and set on a gas stove to boil. Once it has come to a boil, switch off the gas and add sugared winter melon strips for sweetness. Leave it for an hour to cool and pour the barley water into a 1.5 litre container meant for hot water. Then, fill up the pot with water and set to boil again. So, we would have another 1.5 litre of barley water.
Now, we have our drink which I usually take two days to consume. What about the meal I was talking about? After pouring out the second pot of barley water, let the barley and winter melon in the pot cool further. Then, transfer into a bowl for a nutritious meal which is rich in Germanium! Barley is a healthier choice compared to white rice too.
No prizes for guessing what did I have for lunch today. ;)
A few years ago, I was involved in a motor vehicle accident. A motorcyclist crashed into the side of my car but claimed that I crashed into him. It was also "fortunate" for him that he had an instant witness in a car behind my car. The witness also happened to be someone familiar with the ways of insurance claims. I was helpless.
I made a police report after the incident and called my insurance company. I was called to the Traffic Police headquarters days later to make another statement. Strangely, the police officer seemed to know that "witness" as he asked me if the person was of a certain height, built, looks and if he wore glasses. A regular visitor?
Well, in the end, I received a letter from the Traffic Police for a fine of $200 and was given 9 demerit points. I was devastated. My perfect driving record was ruined. But what could I do? Friends asked me to appeal but I just decided to let it go. Just hope that I would not have such bad luck again.
I also found out later from my car insurance company that they had to compensate the motorcyclist some $15K for a broken toe! I am sure the toe eventually healed. It was an expensive experience as my car insurance premium shot up the following year plus the fact that I paid to repair the damage to the side of my car where the collision took place.
I was told by the car workshop mechanic that such "accidents" were on the rise then. He told me that the claims would usually involve the same few people and after a while, the Traffic Police would investigate and make arrests. Apparently, such scams were not new and happened many years before as well. Just "suay" (bad luck) for me.
Why the sudden melancholic flashback? Well, I was getting my daily dose of news and these were a couple of articles that made me wonder why are there such people in the world:
As the Chinese saying goes: 防人之心不可无. We must always be wary of others.
Dr. Marc Faber shares his latest views on global equities in this interview with CNBC Asia last month.
I think what we should realise is that equities in USA and Europe could outperform equities in emerging markets by simply having relatively smaller corrections. It does not necessarily mean that they would outperform on the upside, they could just be less dramatic on the downside. Now, that is sobering.
However, Dr. Marc Faber's advice is still to stay in equities and commodities as these are expected to do much better than bonds and cash in the next decade.
A really bad day for Genting SP as price action formed a bearish engulfing candle. Price started the day at $2.15 and closed at $2.06. What is worrisome for long holders here is the fact that volume expanded quite a lot on a black candle day. In fact, it is the highest since 3 December 2010.
The confluence of 20d, 50d and 100d MAs at $2.13 could well be the immediate resistance now while trendline resistance is at $2.19. Immediate support is at $2.00 which is followed by $1.92, $1.85 and $1.78 which is provided by the rising 200dEMA. So, is Genting SP's share price going to crash? Who knows but let us take a look at the weekly chart for a look at the longer term picture.
Bollinger bands are squeezing for an imminent change in direction after a period of low volatility, it seems. The MACD completed a bearish crossover with the signal line in late November 2010 and has been in decline since. The OBV suggests that distribution has been going on since the middle of September 2011. Both MFI and RSI show a decline in momentum. Through all these, volume has been declining. However, if today's volume were to be replicated through the rest of the week, volume would be very high this week.
Things look precarious. Let us see what Lady Luck has in store for Genting SP.
Monday, 07 February 2011
Genting SP: A rebound or a reversal?
Connecting the highs of 3 and 17 January gives us a trendline resistance. We could see $2.00 tested next if the bouyant price action follows through. It also remains to be seen if $1.93 is resistance turned support. I am monitoring this counter as I get ready to divest some.
Capitamalls Asia: Broke out of downtrend but still at resistance.
One of my favourite possessions is my wallet! I truly can't live without it! This was bought with money from my first pay cheque 15 years ago. It is a Heritage brand genuine leather wallet made in W. Germany and cost slightly more than $100 then. I remember I got it from Metro in Marina Square. The leather is really nice and soft. Good quality stuff. I can't find this brand anymore in Singapore. If you know where to get it, let me know. I would like to standby a replacement wallet, just in case.
This next item is a collapsible umbrella which I bought from Japan in 1998. Cost: JPY1,000 (equivalent to $15 in those days). I really like how compact it is and it fits into my briefcase. I am never caught without an umbrella when it rains. I doubt I could get one at the same price now even if it was still available.
Do you have some old stuff which you are still using today? They don't make things the way they used to, do they? So what if they are old? Old is gold. :)
Tea with AK71: Some of my stuff (Part 1).
I received a call from a friend earlier today and the conversation went like this, to the best of my memory:
Fren: Not selling?
Fren: Consider buying more?
We talked a bit more about other stuff before hanging up. I forgot to ask my friend which blog he went to. I guess it is not important but the conversation shows how much influence blogs could have and I have to keep reminding myself whenever I blog to be very careful and not make sweeping statements. If blogging means saying anything we want just because we feel like it, we are not any different from, er, anyway, here is the chart for Healthway Medical:
From the MFI, there is no doubt that this counter is oversold but that is gradually being corrected as we see it forming higher lows. So, the selling pressure has eased. A quick look at the OBV confirms this as it has mostly flatlined.
The MACD seems to be poised for a bullish crossover with the signal line in negative territory and we have a buy signal on the histogram. However, note that the signal was on the back of very low volume. So, I wonder at its strength. The 20dMA is completing a dead cross with the 50dMA and this is at 15.5c, exactly where the price closed in the last session. Could be a strong resistance. Conventional wisdom is to sell at resistance in a downtrend. Trendline resistance would be at 16.5c in the next few sessions.
However, if a higher low is formed in the near future, and it seems that there is a chance of this happening, we should look out for signs of possible reversal. I am not adding to my long position here. I will wait and see.
I was chatting in LP's cbox and I cannot remember how the conversation went but I talked about some of my stuff which is really old but still in use. I mentioned that I have a T-shirt which I bought in Secondary 2 which I am still wearing today. It is very comfortable and I even wear it out sometimes. If we do our sums quickly, this shirt is 26 years old this year!
A cboxer, Crystal, said:
Make that a jingle and we would have an instant hit! Dick Lee, are you reading this? Or maybe Lady Gaga? I must try to keep up with the times. ;p
The MACD has just completed a bullish crossover with the signal line but it is still in negative territory. Could we see it crossing into positive territory soon? The MFI's uptrend is intact as the trendline support was tested again. We will need to see price or volume (or both) improving in the next session to send the MFI bouncing higher.
Although the bias is for price to weaken, in case of a breakout, the next resistance levels to watch are the high of $1.97 touched on 17 Jan, $2.00 candlestick resistance and $2.04 which is likely to be a strong resistance as that is where the declining 100dMA would approximate soon. Price could also go higher because it has, once again, broken out of its downtrend, although on low volume.
Fundamentally strong but technically weak, taking profit as the counter experiences a rebound could be a good idea. I would reduce by selling some as resistance levels are tested and keep the rest just in case price does go higher.
CapitaMalls Asia: Testing resistance.
I went to my favourite malls again today. Parked at MBLM. Ate at Din Tai Fung, got complimentary parking for 4 hours and took a walk to MBS. A well planned outing is a happy outing.
Some were tossing raw fish (Yu Sheng) to usher in good luck and prosperity for the Chinese New Year,
while some followed the example of the Lord Buddha by feeding bits of themselves to some hungry fish. ;-p
Assuming that he had bought 4 lots at 98.5c /unit, his average price including rights units would be:
98.5 x 4 + 50c x 5 /9 = 71.55c /unit
At the estimated annualised DPU of 6.4c for 2011, it would mean a yield of 8.94%. Not bad. If he managed to get 1 lot of excess rights later on, the average price would be 69.4c which means a yield of 9.22%! I like this.
Of course, buying more, increasing their long position, when the counter's unit price plunged to 66c XR would have been doubly rewarding.
However, recognising the strength of this REIT and believing that it is undervalued even at 76c, it might be a good move for some to invest in the REIT once more or to increase their exposure, whichever the case may be. This is from a purely FA perspective, of course.
Personally, I am not adding to my long position. Why? I have a sizeable exposure to this REIT with costs ranging from 42c to 96.5c. 42c? Yup, those I bought during the last bear market. 96.5c are those I bought when the counter went CR which are really 70.67c after taking into account the rights. So, unless the price is at a very attractive level, I have no compelling reason to buy more.
Now, I am going to look at the technicals which are looking interesting.
On the daily chart, right away, we see that the Bollinger Bands are squeezing. An imminent change in direction after a period of low volatility? Which way would it go? The MACD has been falling as a bearish crossover was completed sessions ago. Momentum is weakening. Immediate support is at 75c.
I turn to the weekly charge to look at the longer term technicals. A white spinning top 4 weeks ago was followed by a doji which was in turn followed by a hangman. All possible reversal signals. Certainly, price action has been pushing the upper band and seems to have grown tired. Lower highs on the MFI confirms the tiring longer term demand. Although 75c has been identified as the immediate support in the daily chart, see how the weekly chart suggests that strong support is at 72c? This is where the rising 20wMA would be approximating soon. Caution is advised. There could possibly be a better time to buy more.
I continue to believe in the strong fundamentals of First REIT but at 76c, given the current technicals, I am not a buyer.
First REIT: XR and fair value.