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CapitaMalls Asia: Broke resistance.

Thursday, October 18, 2012

I got into CapitaMalls Asia way too early. However, taking a cue from the weekly chart, continual buying means my current long position is in the black. Of course, I have collected some dividends in the meantime as well.

Of course, what I have done is by no means brilliant. Far from it. The brilliant thing to do is to buy only when share price has troughed and looks to be turning up. Another lesson for me.


Technically, CapitaMalls Asia's share price broke resistance at $1.70 and it remains to be seen if this could be resistance turned support. With all the MAs rising, it could indeed be the case although a dip to test the rising 50d MA for support would not be too far fetched. The 50d MA is currently at $1.66.

The rising OBV suggests continual accumulation by smart money in the last 12 months. If this reading is correct, we could see share price climbing a wall of worries in the next few months.

Related post:
CapitaMalls Asia: To buy on possible weakness.

18 comments:

FoodieFC said...

i sold at 1.56 =(

Don_Jerome said...

Hi AK!

Might I ask you to explain what the meaning of smart money is? You mention it in a number of post, but I'm not sure if I understand it right. Does smart money mean people who read charts?

warmest regards
Jeremy

AK71 said...

Hi FoodieFC,

You know what they say about nothing wrong with taking profit. Money in the pocket. :)

AK71 said...

Hi Jeremy,

"Smart money" refers to people who are in the know and we want to do what these people do to make money. By reading charts, we might be able to tell what these people are doing. So, are people who read charts "smart money"? ;p

Of course, it is just a figure of speech. :)

JCK said...

Smart Money = Insiders :)

AK71 said...

Hi JCK,

They would be a big sub set, I have no doubt. :)

Don_Jerome said...

haha...okie. I get it now.

thanks AK, JCK. :)

FoodieFC said...

yea, nothing wrong. In fact I sold as I was expecting china market to pull it down. But well it rose instead.

tts life =)

AK71 said...

Hi FoodieFC,

Yes, it is hard to guess what Mr. Market would do next but that does not stop us from trying. ;p

opal said...

I think the current price is still attractive to enter if you believe in its growth potential.
If there is a pullback due to crisis in Europe or US, buy more.

AK71 said...

Hi opal,

Your reasoning resonates with me. It is an approach I have adopted in many instances too. :)

opal said...

Deciding when to sell is much more difficult. :p
How do you decide?

AK71 said...

Hi opal,

You know what WB says about the best kind of stocks to buy are those which we have no intention of selling? ;p

Yes, when to sell is always a bit tricky. Technically, people might look for signs that the uptrend is ending. Fundamentally, people might look out for deteriorating numbers. There isn't a universal solution to this question, I feel. :)

Ken said...

Dear AK71,

Having read your blog silently for past few months, observing SMOL, FoodieFC and other fellow members, I've decided to input my two cents worthiness (Am I welcome?).

As of current impulsive Mr Market, retreating from shares is an imprudent tactic. From past trends, gearing ratios, NAV, DPU (some companies have, others not), latest news are means of identifying when to sell.

However, with modernization and critical analysis, I realized that "selling" does require some formal knowledge on the organization news (I meant insider news).

Enter when you feel right (not others instruct you), Exit when you deemed fit (not adhering to the bandwagon fallacy)

AK71 said...

Hi Ken,

Everyone is welcome to share their thoughts here. Thanks for sharing yours. :)

AK71 said...

CMA gets about 20% of its earnings from the Singapore malls. CMT reported 3Q12 DPU coming in flat on-year at 2.42 cents, with net property income up 4.3% at $112.1 million. Possibly providing an additional fillip, Hong Kong-listed property plays are rallying, amid indications of fund flows into the city.

Orderbook quotes suggest the stock may struggle to test Friday's $1.82 intraday high, also its 52-week high. CMA's April 2011 peak at $1.92 may offer a near-term cap.


DOW JONES & CO., INC.
22 OCT 12.

Jay said...

Hi AK:

I think averaging down while you accumulate a stock that you believe in is not a bad idea.. you normally cannot predict when exactly it's 'turning up' (I currently try this with the China market, e.g. A50 or CSI300).

So with a stock like CMA that has risen a lot already, there's only two options: sell it, and hope it will fall so you can recollect cheaper; or hold it, and potentially accumulate when it retreats a little.

Given I continue to believe in the long term story of CMA (and CapLand for that matter) I'm inclinded to remain invested even if I have to suffer setbacks. Question then when to accumulate more.. 1.66?

Jay

AK71 said...

Hi Jay,

Sounds like a plan to me. :)

Well, if you are going to buy now and then buy more if prices were to decline, you want to look at the charts and find the technical price supports. This should be helpful.

I also believe in the longer term prospects of CMA and remain vested although, on hindsight, I went in too early. ;p

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