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CapitaMalls Asia: Pulling back on low volume.

Thursday, January 20, 2011

I bought more shares of CapitaMalls Asia today at $1.91 as its share price retreated to test its support at $1.90. I like the picture which is forming which suggests a low volume pull back taking place.

With a sell signal appearing on the MACD histogram and the MACD still in negative territory, although it has been rising above the signal line, one could not be faulted for staying cautious. Look at the RSI and it is clear that the trendline support is broken. However, look at the MFI which takes in not just price but volume as well, support is just being tested.

Whether the uptrend support at $1.90 holds up is important for the counter in the near future. If it breaks, the nascent uptrend is in jeopardy and I would turn cautious  If it holds up, price could bounce off and move higher. With the rising 20dMA on course to meet the falling 50dMA, expect some volatility but the technicals do have an upward bias for now and a golden cross is in the works.

Related post:
CapitaMalls Asia: A sustainable reversal?

Golden Agriculture: Looking to the 100dMA.

Golden Agriculture's share price continues to weaken with a gap down today forming a wickless black candle on heavy volume. Price closed at 74c which seems to be a relatively strong support in the immediate future. Some asked if I would consider buying in at 74c. I don't think so.

Of course, price could rebound after a hard sell down. The RSI has entered the oversold region with the MFI just bordering on oversold. However, look at the OBV which shows sharp distribution and this could continue as the MACD dipped into negative territory. If a rebound happens, it would probably do a gap cover to 76c where it would meet with resistance.

On 15 January, I asked "How low could the price fall to? No one can say for sure but drawing a trendline support linking the lows of 30 Sep and 8 Oct coincides with the rising 100dMA and, to me, this suggests a much stronger support at this level and would be a more ideal entry point. The 100dMA is currently at 68.5c." The 100dMA is closing in on 70c and that is when I might consider adding to my long position if there are clearer signs to do so, not sooner.

Related post:
Golden Agriculture: Short term uptrend broken.

Saizen REIT: Retesting 18c resistance.

Wednesday, January 19, 2011

Today, Saizen REIT started the day at 18c per unit but in the late afternoon, a single transaction of 3 million units was sold down at 17c before price recovered and closed at 17.5c. This formed a black candle with a lower wick. Immediate support remains at 17c and the rising 20dMA as well as the trendline support suggest that this could be a strong support.

The RSI has declined but remains in overbought region. The MFI has broken its uptrend and falls towards 50% which could act as a support. No sign of distribution on the OBV. Overall, the situation is rather benign and there is support. 18c remains the resistance to watch. It remains the ideal price at which to reduce exposure, being the high of 2010 and likely to remain strong in the memories of market participants.

Related post:
Saizen REIT: Attracting some big money?

FSL Trust: 4QFY10 results.

I have been divesting my stake in FSL Trust as its unit price strengthened in recent weeks. The last time I sold some was at 48c on 7 January, less than a fortnight ago. Then, I said "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."

Despite what the management says, the Trust's numbers are really weak as it reported its results today and the following should cause some concern:

1. Reduction in net cash from operations which reduced year on year by 19.6% and quarter on quarter by 7.8%.

2. A full year net loss of US$5.67million whereas it registered a profit of US$8.42million the year before.

3. A loan tranche maturing in April 2012.

See Press Release here.

Technically, volume has been rising as price stayed in a tight trading range between 47c and 47.5c mostly. 48c was only tested in three sessions. Today, volume was very thin as a BUY signal appeared on the MACD histogram. The 20dMA has been rising and is now at 47c while the 50d and 100d MAs are rising to meet the declining 200dMA. Golden crosses in the making? Perhaps. The MFI, however, has turned down after hitting 50% which acted as resistance. The overall picture is one which suggests further upside in the current time frame could be limited.

FSL Trust released its results after 8pm tonight. So, it remains to be seen how the market would react tomorrow. If the support provided by the 20dMA at 47c should break, stronger support could be found at 45c which is where the 50d, 100d and 200d MAs are approximating. I would sell into strength and 48c is the resistance to watch.

Related post:
FSL Trust: Sold some at 48c.

Raffles Education: Broke resistance.

A spectacular breakout today with a 3c or 10% gain for Raffles Education! A wickless white candle was formed on this up day although it was preceded in the previous two sessions by a spinning top and a doji, both potential reversal signals. So, the resistance at 30c so decisively taken out today was as surprising as it was spectacular.

Buy signal is spotted on the MACD histogram while the MFI and RSI remain in overbought territories. OBV shows a spike in accumulation. Question: Could the price go much higher? I see the next resistance at 34c which was the high of 12 July 2010. The current price of 33c is also a strong resistance as provided by the 150% Fibo line and if 33c were taken out, 34c is most likely attainable.

Raffles Education: Acquisition of Merchant Square. Fair value estimate decreases marginally from S$0.285 to S$0.28 (still based on 18x FY11F EPS). Maintain HOLD. Read research article here.

Related post:
Raffles Education: 200dMA resistance again.

Courage Marine: Retreating to support.

Yesterday, I mentioned that "Looking at the chart, immediate support is currently at 21c although it seems precarious as MFI and RSI spiked into overbought regions. Any weakness could see the counter pulling back to 20c which offers a stronger support and would correct the overbought condition."

The excitement that came with the prospect of dual listing by the counter petered out quickly as price formed a wickless black candle and closed at 20.5c today, just 1 bid shy of the 20c support I mentioned. Looking at the buy queue which formed at 20c, it does look like it would be a strong support.

With both the MFI and RSI exiting their overbought regions, we could see the overbought condition corrected very soon. We could see the MFI retest its uptrend support which means that volume and price could fall further in the meantime.

20c support could indeed be tested sooner than later while 19c is where we find a clustering of the MAs and that is where we would find the strongest support in case of severe weakness.

CIMB downgrades bulk shipping to "underweight". Read article here.

Bloomberg, CIMB Research.

Related post:
Courage Marine: Dual listing.

Saizen REIT: Attracting some big money?

Tuesday, January 18, 2011

Some big player seems to have taken an interest in Saizen REIT today. In a single transaction, 1.5m units were bought up at 17.5c per unit while 2.418m warrants were bought up at 8.5c each, setting the tone for the rest of the session.

I have some friends and readers who asked me if it is too late to go long on this REIT. Well, I might not be the best person to ask because I have been vested in this REIT for more than a year and at unit prices 16.5c and lower that I do not feel inclined to add to my long position at the current prices. However, I will try to be objective here.

The 100dMA continues to rise towards the 200dMA and seems on track to forming a true golden cross in time. The MACD continues to rise above the signal line in positive territory. OBV shows continual accumulation. The RSI is overbought but the MFI is not. This suggests that price has moved up too quickly but overall demand is still moderate. The upmove in price has not been accompanied by any crazy expansion in volume which suggests that a sharp pullback is unlikely.

The uptrend that started on 17 Dec is still strong. The rising 20dMA, in fact, approximates the trendline support. So, it is my opinion that this trendline support should be a strong one. As accumulating at supports in an uptrend is the thing to do, for anyone who wants to go long here, such a support is to be found at 17c in the near term.

For anyone who is thinking of selling into strength, the high of 14 Jan 2010 should be the resistance to watch. Selling at resistance is conventional wisdom. Of course, if resistance should break, more upside is likely and resistance could become support. When in doubt, hedge. Sell a portion, big or small is up to you and keep the rest, just in case.

Fundamentally, I believe the fair value of this REIT is closer to 19c and, if YK Shintoku's CMBS were to be successfully refinanced, the fair value would be closer to 20c.  These values assume that the warrants are fully exercised and they are what I think the REIT is worth. What Mr. Market thinks could be quite different.

Related post:
Saizen REIT: Golden crosses.
Saizen REIT: Steady.
Email exchange with a reader on some REITs.

K-Green Trust: Results for year ended Dec 2010.

Here are the highlights:

1. Profit after tax for the period from date of listing on 29 June to 31 December 2010 was $8.7 million, 22.1% higher than forecast.

2. Earnings per unit (EPU) for the period from date of listing to 31 December 2010 were 1.39 cents.

3. Net asset value per unit as at 31 December 2010 was $1.16.
4. Distribution per unit (DPU) of 4.31 cents was higher than forecast by 10.2%.
5. Annualised distribution yield was 7.9% based on unit closing price of $1.07 on 31 December 2010.

Full report here.

Some readers might remember an earlier blog post in which I questioned if K-Green Trust was a bad investment. In that post, I said "If it could land lucrative acquisitions with cheap debt, we could also see it reducing its payout ratio and keeping cash for asset renewal purposes. To think of KGT as a static business trust with no growth opportunities could be rather short sighted.  Why? Because it has zero gearing unlike CitySpring Infrastructure Trust." This is still a valid assumption but the Trust has yet to announce any such plans.

DPU of 4.31c will be paid out on 10 March 2011. This probably explains the bump up in the Trust's unit price to $1.10 today, forming a wickless white candle in the process. The buy signal on the MACD histogram yesterday has been confirmed. Drawing some Fibo lines suggests that further upside could meet with stronger resistance at $1.13. Is this attainable? The MFI has formed a higher low and further upside from $1.10 is probable.

Related post:
K-Green Trust: A bad investment?

Cambridge Industrial Trust: Land acquisition by SLA.

Cambridge Industrial Trust Management Limited, the Manager of Cambridge Industrial Trust (“CIT”) (“the Company”) wishes to announce that it has received a formal notice from Singapore Land Authority (“SLA”) on 11 January 2011 with regard to the compulsory acquisition of land on Tuas Road, Pioneer Road, Tuas West Road, Tuas West Drive and Tuas South Avenue 3 for the construction of Tuas West Mass Rapid Transit (“MRT”) extension and road works along the Pan Island Expressway, Tuas Road, Pioneer Road, Tuas West Road, Tuas West Drive and Tuas South Avenue 3.

Based on the Company’s initial assessment, three of CIT’s 43 properties will be affected to varying degrees by this land acquisition:

1) 30 Tuas Road (Lot No 1289X pt Mukim 7)
2) 120 Pioneer Road (Lot No 3237M pt Mukim 7); and
3) 1 Tuas Avenue 3 (Lot 1422X Mukim 7)

All or part of the land where these properties are situated will be possessed by the Government by January 2013.

Read announcement here.

Related post:
Cambridge Industrial Trust: Equity fund raising again.
Cambridge Industrial Trust: Fails to deliver.

Courage Marine: Dual listing.

On 14 November 2010, I said that "It would have to take a very bad 4Q 2010 to destroy whatever the company has achieved in positive numbers thus far in 2010."

Although the BDI has been declining and "even if 4Q 2010 does not turn in any profit which I believe is unlikely, net profit this year is already 120x higher than the whole of 2009!" So, I firmly held on, believing that the management would declare a generous dividend when the time comes.

Courage Marine gapped up today as it opened at 22c. My overnight sell queue was filled as I reduced my exposure to the counter by half. For me, locking in a gain now is like getting the dividend in advance. After all, the declining BDI is likely to have a negative impact on Courage Marine's earnings, going forward. The BDI has already broken the previous low and it is yet unclear where the next low would be but with greater increase in bulk shipping capacity in the near future, upside could be limited as supply outstrips demand.

 (Source: Bloomberg)

What would I do with my remaining position in Courage Marine? I would hold on to see if price could go higher either through further developments in its plan to dual list in Hong Kong or through a possibly generous dividend payout.

Looking at the chart, immediate support is currently at 21c although it seems precarious as MFI and RSI spiked into overbought regions. Any weakness could see the counter pulling back to 20c which offers a stronger support and would correct the overbought condition. Further upside could see Courage Marine retest a many times tested resistance level at 23c. I would be tempted to sell more then.

Related post:
Courage Marine: 3Q 2010 results.

Raffles Education: 200dMA resistance again.

Monday, January 17, 2011

A white spinning top formed today as volume expanded. Price closed at 30c, resisted by the declining 200dMA, after touching a high of 30.5c. 200dMA is still a formidable resistance.

The MFI and RSI are still in overbought territory while the OBV rose further. Momentum is still positive as suggested by the rising MACD in positive territory. With the MFI and RSI overbought, a pull back could take place soon. In such an instance, expect immediate support at 28.5c followed by 27.5c.

However, if volume should expand as the bulls try to push price higher, resistance provided by the 200dMA could be overcome and, in time, we could see price retest the high of 34c achieved in July last year.

Related post:
Raffles Education: Resistance at 200dMA. 

CapitaMalls Asia: A sustainable reversal?

This counter formed a white spinning top today as it broke resistance at $1.95 to touch a high of $1.97, which is where the declining 50dMA is approximating. Of course, a spinning top is a sign of indecision and it was on the back of increased volume. It is not a strong bullish sign. The tug of war between bulls and bears is still significant here.

The uptrend which started on 20 Dec is still valid and the trendline support is at $1.89. With the 20dMA at $1.90, this is where we would find initial support in case of a pull back in price. This support should hold and if it does, we could be looking at an ascending triangle pattern. This would give me a target close to where the 100d and 200d MAs are at, approximating $2.08 and $2.10 currently.

OBV continues to climb, suggesting continuing accumulation. MACD has risen once more above the signal line and could be ready to cross into positive territory. The MFI and RSI are both rising after successfully testing 50% as support. Things are looking good here and I would accumulate on weakness.

Related post:
CapitaMalls Asia: $1.90 resistance turned support.

Golden Agriculture: Short term uptrend broken.

Saturday, January 15, 2011

The negative divergence between the rising share price and falling MACD which we have observed for weeks is showing its colors. Price broke support at 78.5c provided by the 20dMA on 10 Jan and, in the last session, fell to test support at 76c provided by the rising 50dMA.

Price falling below the 20dMA suggests that the shorter term uptrend could be over. Drawing a trendline support linking the lows of 8 Oct and 24 Nov verifies this as price closed below this support for the first time in months.

How low could the price fall to? No one can say for sure but drawing a trendline support linking the lows of 30 Sep and 8 Oct coincides with the rising 100dMA and, to me, this suggests a much stronger support at this level and would be a more ideal entry point. The 100dMA is currently at 68.5c.

Fundamentally, I believe that demand for Crude Palm Oil would remain strong with higher consumption in Asia. I would look out for a chance to accumulate on any sharp pullbacks.

Related post:
Golden Agriculture (3 Jan 11)

CapitaMalls Asia: $1.90 resistance turned support.

Friday, January 14, 2011

CapitaMalls Asia's $1.90 former resistance was tested today as support. A resistance once broken could become support but this always needs confirmation. Today, we have confirmation. My buy queue at $1.90 was filled.  This was a smallish transaction which I see as a hedge in case $1.90 held up as support.  This is a case of averaging up as my original long position was bought at $1.85 earlier on as the share price formed a bottom.

Usually, once support is confirmed, we would see more people buying in as they feel more confident. However, buying at support might not be available by then and any buying would be done at higher prices. With price closing once again at $1.92 after touching a high of $1.93, let us see how things turn out next week. Expect initial resistance at $1.95.

Related post:
CapitaMalls Asia: Plague, no more?

Healthway Medical: Back at support.

On 20 Dec, I said "Healthway Medical closed the gap today at 15.5c. Am I expecting more downside? Share price is pulling back from almost overbought conditions and I do not expect any huge downward movement. Notice that the decline in share price has been on the back of reducing volume." Price closed at 15.5c support yet again today.

The MACD is approaching zero. Would it recover or would it cross into negative territory? The MFI has emerged from oversold territory and is rising gently, suggesting a return of demand, although weak. Volume has been relatively low.

The RSI has been forming higher lows which suggest a strengthening in terms of buying momentum based purely on price. The OBV is flat which suggests a lack of distribution and accumulation. Verdict? This counter seems to be consolidating and, at this point, it could go either way. I am not doing anything here.

Related post:
Healthway Medical: Closed the gap at 15.5c.

AIMS AMP Capital Industrial REIT: Sell down at 21.5c.

Someone asked me if I knew why there was heavy selling down of this REIT today. I do not have the answer. Checking the time and sale, 8,987 lots were sold down at 4.58pm, wiping out the entire buy queue. The OBV plunged yet again, indicating heavy distribution activity.

22c is, once again, resistance and immediate support is at 21.5c.

I will continue to accumulate at 21.5c and, perhaps, even 21c if the 200dMA should be tested as support. Fundamentally, buying more at 21.5c and 21c would give a handsome yield of 9.3 to 9.5%.

Related post:
AIMS AMP Capital Industrial REIT: 22c support.

Old Chang Kee: Filling not enough.

We do not have to be housewives shopping for the family to know that prices of foodstuff are going up. I like buying the occasional curry puff from Old Chang Kee and today I found out that the curry puff is S$1.30 each! I thought it was still S$1.20 each. Anyway, I had a craving. What to do?

Back in the office, I happily took a bite and I bit into a cavity! Looking into the curry puff, I found it half empty! Really, I am not kidding. I took photos of the errant curry puff:

I was somewhat unhappy and amused as well. The price went up and the amount of filling reduced at the same time! What a combination! Maybe, I should buy Old Chang Kee's shares? Perhaps, this experience is an important part of FA. ;-p

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