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LMIR: A slow and steady climb.

Thursday, February 2, 2012

LMIR's unit price has been slowly and steadily climbing higher and this is netting me some handsome capital gains on the rights units from nil paid rights purchased not too long ago.

Remember I mentioned that LMIR was too cheap to sell? I still think it is too cheap to sell but it is approaching the fair value of 41c which I ascribed it back then. Technically, it is now also closing in on the next resistance level at 39.5c. 

If it should break 39.5c convincingly, we could see resistance provided by the declining 20wMA at 41c tested next. 41c coincides with the fair value I have ascribed to the REIT's unit price and I expect strong selling pressure if it should be tested.

I have done another partial divestment today at 39c, one bid away from the immediate resistance of 39.5c, taking some gains off the table. With this partial divestment, I now retain only a fifth of all the rights units from nil paid rights I purchased in its rights issue.

Why not wait for 41c? There is no way we can be sure that 41c will be tested and I am beginning to see some signs of possible weakness in the form of lower highs on the MFI and Stochastics with unit price pushing higher. The lower high on the MFI suggests weaker demand with price going higher.

On the weekly chart, the MACD has completed a positive crossover with the signal line but it is still in negative territory. Although MFI and Stochastics' gradual rise from their oversold territories suggest that there is some support for the REIT's unit price, we could see some price weakness in the coming weeks.

Accumulating when longer term supports are tested would be a good strategy. On the weekly chart, I see 36c as a technically attractive price to add to long positions.

Related posts:
LMIR: Partial divestment at 38c.
LMIR: Too cheap to sell.


Ray said...

Hi AK,

Thanks to you showing the way, I made abit through LMIR too.
Partially divested at 0.395.
The bull market is making me slightly edgy though. Have a feeling a correction is overdue.

AK71 said...

Hi Ray,

Haha.. I am happy to hear that. :)

LP, the blogmaster of Bully the Bear, says he will give me an ang pao because of this. Paiseh lah. ;p

I cannot help but feel that the secular bear market is not over yet. Just look at the state of things.

In a bear market, we could experience strong rallies too. Bear market rallies are great opportunities to make some money or to cut some losses.

Of course, Mr. Market does not care two hoots what I think or say. Just in case I am wrong, I remain invested in high yielding REITs. :)

Ray said...

Haha, unlike you big players who can buy by the truck load, I only buy small small, so cannot afford an ang pow. but I will try to click on the adverts on your website ok? ;)

AK71 said...

Hi Ray,

I wasn't hinting anything. Sorry if I gave you that impression. :(

As for visiting my sponsors, that is much appreciated. Thank you very much. :)

ZUJI does not pay me anything unless you buy something from them. So, don't visit them unless you are planning a trip. ;)

Big Bang said...

Hi AK, may I know what do you think is the resistant price for LMIR in this year? And do you expect the dividend to exceed $0.03 this year? Thanks.

AK71 said...

Hi Big Bang,

The next resistance level to watch is 41c which coincides with the fair value I have for the REIT's unit price.

A minimum DPU of 3.26c for 2012 is what I am expecting.

You want to see this blog post:
LMIR: Too cheap to sell.

Big Bang said...

Thanks AK. Although I have subscribe to the rights, I still have a long way to breakeven, so I'm really hoping that it will go up to at least $0.45. On the dividend, I actually think that it might not be so high, because they have only completed the acquisition in Dec 11, so this quarter's dividend might be affected. Anyway, thanks for the insights. Cheers! :)

AK71 said...

Hi Big Bang,

I bought a large number of nil paid rights and these became rights units with prices in the mid 30c. So, I am fortunate to be able to divest partially as its unit price rose to lock in some gains.

As for the DPU in 2012, yes, you could be right. If the REIT should disappoint during its results presentation come 16 Feb, Mr. Market would probably show his displeasure in the usual way. ;)

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