Genting SP: Bearish engulfing candle.

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.

Genting Bhd., a Malaysian casino group, fell the most in two weeks after Citigroup Inc. cut its revenue forecast for the company’s Singapore unit to reflect a possible drop in gaming volume at Resorts World Sentosa.
Monday, 07 February 2011

© 2011 - The Edge Singapore

Related post:
Genting SP: A rebound or a reversal?

CapitaMalls Asia: Improving technicals.

Price overcame resistance provided by the 50dMA at $1.93 and touched a high of $1.96 before closing at $1.95, forming a white spinning top in the process. Volume expanded nicely as the MACD rose higher. Could we see the MACD crossing into positive territory soon? That would signify the return of positive momentum.

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.

Related post:
Capitamalls Asia: Broke out of downtrend but still at resistance.

Tea with AK71: Some of my stuff (Part 2).

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. :)

Related post:
Tea with AK71: Some of my stuff (Part 1).

Healthway Medical: To buy or not to buy?

 I received a call from a friend earlier today and the conversation went like this, to the best of my memory:

Fren: Hey, are you still vested in Healthway?

AK: Yes, I have some shares left.

Fren: Not selling?

AK: Well, you know I sold off most of my stake a long time ago. Whatever I have left now are either from the rights issue or regular scrip dividends.

Fren: Consider buying more?

AK: If I do buy some now, it's more for trading.

Fren: Why?

AK: I've blogged about it. Go read my blog. Haha... The numbers are not very good. http://singaporeanstocksinvestor.blogspot.com/2010/11/healthway-medical-3q-2010-results.html

Fren: Well, the price went up to 17.5c a while back, you know, but it is back down now.

AK: Yes, I know. I bought some at 15.5c and sold at 17c in December last year. This was because of some news that there could be a new investor.

http://singaporeanstocksinvestor.blogspot.com/2010/12/healthway-medical-and-first-reit-good.html

Fren: Hmmm.. I read somewhere that we should invest in Healthway Medical now.

AK: Really? Any reason given for the call?

Fren: Well, I want to hear from you because I know you used to be big on Healthway Medical.

AK: Yup. I was but that was in mid 2009 when it was really undervalued. Not now. You know this. I blogged about it.

http://singaporeanstocksinvestor.blogspot.com/2010/02/healthway-medical-updated-valuation.html

Fren: The blog I went to says that we should buy shares of Healthway Medical because Singapore healthcare stocks are hot now and most of the healthcare counters' share prices have shot up. Healthway Medical should be next.

AK: Hmmmm... It sounds rather speculative to me.

Fren: But you are still vested, right?

AK: I always try not to divest all my investment in any company just in case the price goes up further. However, you must remember that whatever I have left is fully paid for with gains from divesting most of my stake in the company last year. So, if I show any interest in the company's performance, it is mostly academic.

Fren: So, you don't think I should buy?

AK: Haha.. This is the question I fear most. Fundamentally, the numbers have been rather dismal. The management has sold a very compelling proposition to investors. Could it deliver? Full year results should be announced sometime this month. Wait for it.

Fren: OK, then, what about a quick trade since you made money in your trade recently.

AK: Honestly, I was just lucky that my chart reading that time turned out right. I could do a TA for Healthway Medical later. Check my blog this evening.

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.

Tea with AK: Some of my stuff (Part 1).

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:

no no. i believe but i find it amazing in terms of the condition. cos my secondary school t shirt can only wear @ home liao.... what washing machine and washing powder u use!

I was really amused by what another cboxer, Evolution, said:

Evolution: lobster taller than small girl , ak's t shirt older than evo

CapitaMalls Asia: Broke out of downtrend but still at resistance.

A white spinning top was formed on low volume in the last session. Closing at $1.93 is exactly at resistance provided by the declining 50dMA as identified in my last blog post on the counter.

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.

Related post:
CapitaMalls Asia: Testing resistance.

Tea with AK71: A fishy CNY tale.

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

祝大家新年吉祥!

First REIT: Buying more?

Some readers would remember that I announced a fair value of 80c per unit for First REIT. This was on 1 Dec 10.  In that blog post, I made the following comments and also did some calculations:

A friend called me yesterday and said he might buy into First REIT with a view of getting more excess rights. I gave him my full support and told him he is likely to make money in this exercise. It turned out that he didn't get any yesterday.

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.

Now, for people who divested their stake during CR when First REIT's price closed in on its then NAV/unit, is buying back at the current price of 76c silly? It would seem so as not selling their stake then would mean a lower average price now in the region of 70c to 71.5c per unit.  They would also have been eligible for excess rights which would have lowered their average price further.

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.

Related post:
First REIT: XR and fair value.

Cache Logistics Trust: Weakness after XD.

Cache Logistics Trust went XD and the price gapped down, forming a big black candle, rebounding a tad as it hit support at 97c provided by 2 longer term MAs, the 100d and the 200d MAs. This is a familiar pattern. If we look at the candlestick of 3 Nov 10, it was the same story of weakness after XD. Could we see the unit price fall further? Quite likely. I have been waiting for a nice entry price for some time now. When to buy?

On 23 October 10, I said, "On 29 July, CLT was trading at $1.01 per share. This would give a yield of 6.77% based on an annualised DPU of 6.84c. Its unit price is now 98.5c, not much lower. That's unattractive for me although I recognise that it is a relatively safe investment." Read blog post here.

On 16 December 10, I went on to say, "With an annualised DPU of 7.76c, at today's closing price of 94c, the distribution yield would be 8.26%. Still not attractive enough for me but I recognise its strong numbers which would convince me to start a small long position if price would decline to test its historical low of 91.5c for a yield of 8.48%." Read blog post here.

Technically and on hindsight, 94c would have been a great entry price as price touched a low of 93.5c on 16 Dec and went on to touch a high of S$1 on 28 Jan. Fundamentally, I notice the annualised DPU increased from 6.84c to 7.76c. This is a strong passive income generator and the numbers show it. More than ever, I want a slice of the pie.

Now, 94c would stay in the heads of market participants. People like myself who were waiting for a retest of 91.5c would now wait for a retest of 94c instead before entering. Judging from past data, price could continue to weaken for the next 4 to 6 weeks. I am going to watch this as I definitely like this REIT for its strong numbers which justify the lower distribution yield.

The MACD in the last session completed a bearish crossover with the signal line while the RSI broke its trendline support as it falls further from the overbought territory. OBV is rather flat but definitely lower than  2H2010. Signs suggest that people currently vested in this Trust are strong holders investing for income. However, momentum is suffering as some are selling after the counter went XD. I shall wait and see.

Gearing: 23.7%
NAV/unit: 89c
Annualised DPU: 7.76c
Interest cover ratio: 9.3x

It is important to note that Cache Logistics Trust is currently paying out 100% of its income and this would come to an end in December 2011. From 2012, it would pay out at least 90% of its income. As an aside, AIMS AMP Capital Industrial REIT is paying out 97.1% of its income on 15 March (3Q FY2011).

See 4Q2010 presentation slides here.

Tea with AK71: Lucky 4D from ASSI.

In a blog post many moons ago, I asked if gambling was a bad thing. In that post, I said "From a money management standpoint once more, if we budget a small sum of money for entertainment and classify gambling as one form of entertainment, as long as we stay within what is budgeted, gambling would not become financially crippling and it might even be rewarding.  The Chinese people have a saying, "mai ge xi wang", or "buying a hope".  This, I feel, is not a bad thing." Read blog post here.

I have a habit of buying a few BIG SWEEP tickets every month. I would also try my luck at TOTO if the prize money is big enough such as the recent $5m TOTO.

Now, with the Chinese New Year coming up, perhaps I should try my luck once more! If we look at our telephones, we would realise that we could dial ASSI and the numbers are 2774. Could these be the lucky numbers for betting at 4D in the first week of the Chinese New Year?

Wishing all Chinese readers a Happy and Prosperous Chinese New Year! GONG XI FA CAI!

Just found this on YouTube. Not one of the traditional Chinese New Year songs. A mixture of new, old and funky! I like:

AIMS AMP Capital Industrial REIT: Buy at 21c.

I am still in the queue to buy more of this REIT at 21c. With an annualised DPU of 2.04c, buying at 21c would give an attractive yield of 9.71%. Technically, 21c seems like a strong support as well, underpinned by the 200dMA.

I like to use the MFI as a measurement of demand and it is heartening to see that the uptrend is intact although attempts by the index to rise have been resisted several times at 50% since 21 Jan. An expansion in volume as price pushes higher would see the index move higher as well. When would this happen? Your guess is as good as mine. Bear in mind that the index could weaken to retest its trendline support as well and this could happen if volume or price weakens, or both.

Informed by FA, I would simply accumulate on weakness. This was something written by OCBC Research a couple of months ago:

The industrial sector typically lags the office sector by a few quarters. With the upbeat momentum in the office space, Industrial REITs stand to capitalise on the spillovers to business parks, high-tech and light industrial buildings. In terms of forward yields, Industrial REITs also trade at a premium of 70 basis points to the broader sector. We are bullish on the industrial sector recovery and now have an OVERWEIGHT rating for the Industrial REITs subsector. 

Related post:
AIMS AMP Capital Industrial REIT: 21c at XD.

CapitaMalls Asia: Testing resistance.

Although volume was lower than the previous session, price managed to overcome both resistance levels at $1.88 and $1.90. We could see the resistance provided by the descending 50dMA at $1.93 challenged next. Indeed, it could be argued at price is now at resistance provided by a trendline resistance at $1.92. Overcoming this resistance could see a retest of $1.97, the high of 17 Jan.

The RSI has broken out of 50% and is rising higher while the MFI is now testing 50% as resistance. So, initial observation suggests that although buying momentum is recovering, demand is not very strong. This is a fragile condition which could see things go either way. However, drawing a trendline support yields a very interesting picture. The MFI's uptrend is actually intact!

That $1.83 is now a support of some strength is indisputable. Market participants would remember it as the support which did not break. If this were to be tested once more, I am willing to bet that more buyers would emerge. So, although the longer term MAs are still in decline, the gently rising 20dMA tells a story of possible reversal. Although I am not adding to my long position, I am not a seller either.

Related post:
CapitaMalls Asia: Support at $1.83.