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REITs, NOL, ARA and Hyflux.

Wednesday, January 4, 2012

Hope everyone had an enjoyable long weekend and is not missing the holidays too much.

The bullish movement in the stock market should put smiles on the faces of long holders. Has the bear been vanquished? I think it is too early to think so. So, we might want to make use of the bullish sentiment to lighten our long positions.

For me, I am still heavily invested in selected S-REITs as they could continue to deliver predictable passive income even in a zero growth environment. This is quite different, however, from thinking that S-REITs' unit price would not suffer in tandem with the broader market in the event of a crash. Indeed, it would be naive to think so although, with stronger balance sheets, we should not see the same magnitude of decline as in the last global financial crisis.

If we believe that money should go to where it is treated best, any significant decline in the unit prices of the S-REITs in my portfolio would tempt me with higher yields to add to my long positions. For now, I am keeping the status quo with regards to my S-REITs portfolio.

What about lightening my long positions? Share prices of certain companies went up quite a bit yesterday and I tried to sell some.

Today, my sell order for NOL at $1.22 was filled. With this partial divestment, I made some pocket money from Mr. Market. Why $1.22? That was the high of early September. Indeed, a safer resistance to sell at would be $1.18 as it has been tested many times. I took a chance that the buying momentum could push price pass $1.18 and it paid off. Indeed, price touched a high of $1.23.

However, the formation of a shooting star on the back of higher volume today suggests that NOL's share price could be heading lower from here. If $1.18 cannot serve as support, we could see price retreating to $1.10 which is where we find the 50d and 100d MAs merging.

I was not so lucky with another two counters, ARA and Hyflux.

People would say that ARA's trading volume is so thin most of the time that TA is inaccurate here. I didn't really bother using TA this time as I simply remember selling at $1.30 the last time and tried to do it again this time. Its share price did touch $1.30 last evening but my sell order was not filled. Trying to sell again today at $1.30 proved to be futile.

Well, it is back to the waiting game. If $1.30 should be taken out, I wonder if the next target is $1.45? Allow me my little day dreams.

As for Hyflux, the many white candle days on the back of expanding volumes led me to think that we could possibly see gap closing at $1.365 or even see a test of the support turned resistance of $1.39. Deciding not to be too greedy, I entered a sell order at $1.36. Unfortunately, it turns out that I was still too greedy.

Anyway, looking at the chart, immediate supports are at $1.24 and $1.225. The formation of a black candle on the back on lower volume is good news for long holders. However, that the black candle covers more than half of the preceding day's white candle is ominous. The MACD is rising strongly but it is still in negative territory. So, things could go awry.

I partially divested some of my investment, locking in a small gain in the process. I am just simply managing risk here by reducing exposure. If price should continue its upward trek, I would still stand to gain.

Finally, turning our attention away from the stock market, I have put up new blog posts on my recent trip to Japan. See them at Travel Photos and Videos. More to come. :)

Outside Lumine, Shinjuku. Kitty, "Hey! You can do it!" Believe it!
Related post:
Hyflux: Broke resistance.


Ray said...

Hi AK. Any thoughts on Capitaland? :)

AK71 said...

Hi Ray,

Capitaland's share price looks like it is still basing. Technically, not much to say here.

Of course, it is rather undervalued from a FA POV as you have found out. :)

INVS 2.0 said...

Hi Ak71,

This bearish trend lasted quite long in fact, starting from Aug 1th. Hope the reversal in trend can be sustained.

Anyway, any thoughts on AIMS? I am looking at $0.98 and $1. :)

AK71 said...

Hi INVS 2.0,

I don't have anything new to say about AIMS AMP Capital Industrial REIT. The last time I bought more was at 93.5c.

98c or $1 could see some selling pressure, I believe.

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