Raffles Education: Doji at 28c.

That selling pressure has eased is quite obvious. The MFI has turned up somewhat when it looked as if it was destined to fall into oversold territory. The RSI is rising just a tad in oversold territory. The MACD is just into negative territory and things are looking too marginal to say momentum has turned negative at the moment. Is there a chance of a rebound?

Believe it or not, the uptrend for Raffles Education which started on 21 Dec 2010 is still intact. The trendline support is rising towards 27.5c which is the low today and it would soon reach 28c in the next week. So, what does conventional wisdom say? Buy at supports in an uptrend.

It could also be said that price has been retreating on declining volume and that the doji formed today on relatively low volume is a possible reversal signal. All good but we will need confirmation tomorrow. That's the way of TA. Always needs confirmation.

What would AK71 do? Nothing. Why? Well, the declining 200dMA is at 29c or so. That could become quite a strong resistance given the bearish sentiments with China possibly increasing interest rates again soon to weaken inflationary pressures. Raffles Education's ambition of becoming a real estate developer in China could be a victim of bad timing.

When in doubt, I stay out.

Related post:
Raffles Education: Support at 30c.

Raffles Education: Testing support at 30c.

On 31 January, I mentioned "For anyone who wants to go long on this counter, being patient and waiting to buy some at supports in an uptrend is a good idea. I never like chasing. I rather like waiting for things to come to me."

On 7 Feb, Kim Eng upgraded Raffles Education to a BUY with a target price of 40c as the management affirms its plan to venture into property development in China. Raffles Education is leveraging on its low land cost when it acquired OUC back in October 2007. Raffles Education has obtained approval from relevant authorities to convert about 280,000 sqm of land area in OUC for residential development. It is currently in talks with different interested parties to form a joint venture to co‐develop the site. Based on current achievable selling price, management is confident of generating substantial returns.

Read article here.

The upgrade by Kim Eng might have given the share price of the counter a shot in the arm as a white candle was formed that very day. However, price action has turned bearish since, especially with China's move to up interest rates which could lead to a lower investment demand for real estate in the country.
Read blog post on China's interest rate hike here.

Technically, the massive black candlesticks in the last two sessions were on the back of heavier volumes. The MACD has formed a lower high and is declining under the signal line. A correction is clearly underway. OBV shows that distribution is ongoing while the MFI shows a decline in demand with a lower high.

Looking at the weekly chart, it becomes clearer why Raffles Education's share price is having a hard time clearing 32c. That is where we find the 50wEMA. If we connect the lows from the week of 20 Dec, we get a trendline support which intersects the 20wMA at 28c. This is where strong support could be found if support at 30c should break.

The OBV shows that distribution has been going on since the week of 17 Jan while the MFI continues rising, indicating positive momentum in demand. While there is distribution, longer term demand is still positive.  Buying at supports instead of chasing a rising share price is sound advice.

Related post:
Raffles Education: Correction?

Raffles Education: Correction?

The fanfare that pushed up the share price of Raffles Education to touch a many months high of 35c came suddenly and provided the counter with a sugar rush which is now dissipating. The trendline support was broken four sessions ago and it now remains to be seen if the gentler trendline support below the 20dMA would be tested next. This is at 30c.

If I were to hazard a guess, 30c is likely to be a strong support as that is the price which formed the top of a small bowl before a breakout took place. Market participants would remember the price: not buying then led to missing out on a nice gain in the following sessions.

The MFI and the RSI show that the overbought condition has been corrected. The RSI is actually declining towards 50% and it would be interesting to see if 50% would act as support. The MFI which takes into consideration volume on top of price has flatlined just below the overbought region. This suggests that demand, although weaker, is still strong. Look at the trading volume and we see a semblance of a low volume pull back taking place. Buy more?

For anyone who wants to go long on this counter, being patient and waiting to buy some at supports in an uptrend is a good idea. I never like chasing. I rather like waiting for things to come to me.

Related post:
Raffles Education: A new property play?

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.

Raffles Education: 200dMA resistance again.

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. 

Singapore’s bankruptcies fall to lowest since 1996: Update 1
Monday, 17 January 2011

© 2011 - The Edge Singapore

Raffles Education: Resistance at 200dMA.

Raffles Education extended gains yesterday and closed at 30c, the resistance provided by the 200dMA. A wickless white candle was formed on the back of increased volume. OBV rose steeply, signalling accumulation. MACD rose into positive territory, signalling the return of positive momentum.

MFI and RSI rose higher, crossing into overbought territories. Although signalling heightened demand and positive buying momentum, the indices, being in overbought regions, suggested that further gains could be limited. This panned out today.

A doji was formed today, suggesting indecision. Although the momentum oscillators continue to rise, the OBV has flattened, signalling a stop to accumulation. The explosive rise in price could be at an end. Pull back could find support at 27.5c and 26.5c, as provided by the 100d and 50d MAs, respectively.

Related post:
Raffles Education: Sold at 27.5c resistance.

Raffles Education +5.5%; buybacks give confidence - Kim Eng
Thursday, 06 January 2011

© 2011 - The Edge Singapore

Raffles Education: Sold at 27.5c resistance.

On Monday, 3 Jan 2011, I mentioned "Raffles Education is rebounding in earnest. The MACD broke out of its downtrend and is rising while the MFI and RSI show positive momentum. OBV shows accumulation. Immediate resistance at 26c.  This is followed by 26.5 which is where we find the declining 50dMA. The most formidable resistance is probably provided by the 100dMA which is at 27.5c. The last time price tested the 100dMA was on 21 Sep 2010. For anyone looking to reduce exposure, selling at resistance in a downtrend is conventional wisdom."

Today, Raffles Education broke out of its downtrend which coincides with the declining 50dMA at 26.5c. This was on the back of higher volume. Closing at 27.5c is at resistance provided by the declining 100dMA. An intra day high of 28c was achieved, however, and if volume continues to expand with an upward push in price, the next significant resistance level is at 30c, which is where we find the declining 200dMA.

Could I have been too hasty in selling off my money losing position initiated a couple of months ago? I do not know but I recognise that, downtrend notwithstanding, the 100dMA has been the limit of any rebound the counter has staged for the last 12 months. Could it be different this time? Of course, it could be but this being purely a trade, I chose to follow conventional wisdom.

Capricorn effect, Golden Agriculture, CapitaMalls Asia, Raffles Education and Saizen REIT.

The mountain trekking herbivore did not disappoint as it showed its presence today, sending the STI up by 1.4%. Stock markets in Europe are also higher. "The biggest Asian markets closed higher, as investor confidence was boosted by signs that China's efforts at keeping a lid on inflation may be working....Hong Kong's Hang Seng index rose 400.60 points, or 1.7 percent, to close at 23,436.05, while the South Korean Kospi rose 19.08 points, or 0.9 percent, to finish at 2,070.80." Read article here.

Golden Agriculture moved higher to close at 82c today. Volume although higher is still quite modest. Nonetheless, the bullish crossover on the MACD, breaking out of its downtrend, is encouraging.  The OBV shows continual accumulation while the RSI shows positive momentum.  The MFI, however, has declined below 50%.  MFI is a function of price and volume and the decline reinforces the picture of negative divergence. Support for Golden Agriculture is now a band between 78c to 80c.

CapitaMalls Asia retreated from $1.95 where we find the downtrend resistance line. The counter's downtrend is intact. At the closing price of $1.91, it is supported by the 20dMA. If the support at the 20dMA were to be compromised, the low of $1.83 would be critical as a measure of whether the counter could reverse from its downtrend or go lower. I would keep an eye on the MFI. With a reduction in price and/or volume, the MFI could retest its support.

Raffles Education is rebounding in earnest. The MACD broke out of its downtrend and is rising while the MFI and RSI show positive momentum. OBV shows accumulation. Immediate resistance at 26c.  This is followed by 26.5 which is where we find the declining 50dMA. The most formidable resistance is probably provided by the 100dMA which is at 27.5c. The last time price tested the 100dMA was on 21 Sep 2010. For anyone looking to reduce exposure, selling at resistance in a downtrend is conventional wisdom.

Saizen REIT saw some buying up activity today. Volume achieved was the highest in 3 months on a white candle day. The MACD shows that momentum is positive and improving. OBV shows gradual accumulation. Immediate resistance is at 17c while 17.5c is the top of a basing process that started in April 2010. We could experience strong resistance at 17.5c if ever tested. With the next distribution in March 2011 and probable positive catalyst from the refinancing of YK Shintoku, there is more upside potential for this REIT.

STI rises 1.4% to 3,235.77 at closing.

First Real Estate Investment Trust jumped 2.1% to 72 cents, a four-week high. Singapore’s first health-care property trust said it completed the purchase of two Indonesian medical centers, boosting assets under management to $612.8 million. It said it’s aiming for a $1 billion portfolio in two to three years.

Monday, 03 January 2011

© 2011 - The Edge Singapore

Raffles Education: White hammer.

Bullish reversal candlesticks in this counter's chart have a notorious reputation of lacking follow throughs. So, the reliability of the white hammer formed this session is suspect. Nonetheless, downtrends are rivers of hope and rebounds are not unusual.

The MFI, a measurement of demand, has risen from the oversold region. It has formed a higher low for the second time in the last fortnight. Volume has expanded as price stabilised or rose. This is a sign of underlying demand. Could we see demand improving to push the price higher?

Immediate resistance at 25.5c. Further upside could be limited as resistance is expected at 26.5c, a many times tested support turned resistance, and 27c, where we find the descending 50dMA and the downtrend resistance line.

Raffles Education: A new low.

What started out as a promising up day for the STI was not to be as the index sank almost 1% at closing.

STI drops 0.8% to 3,172.44 at closing
Friday, 03 December 2010

© 2010 - The Edge Singapore

In Singapore, share prices lost early gains to end weaker on Friday following concerns over interest rates. Traders said the market firmed with early gains in regional exchanges as strong US economic data boosted sentiment. But prices pulled back later after China said it would tighten monetary policy next year, suggesting further interest rate hikes to cap inflation.

Read article here.

My portfolio is largely unaffected except for a small long position I have in Raffles Education. This was something I purchased a couple of months ago in early October as I identified a positive divergence between the rising MACD and the falling price on the daily chart. A reader at the time suggested that I could be a bit slow in identifying that divergence and it turned out that he was right.

26c looked promising as a possible double bottom with volume on 3 Sep, when 26c was first touched, very high but volume had been very low when 26c was retested recently. A picture of low volume pull back was also rather clear. Well, today's expansion in volume took out 26c and threw a spanner in the works. 26c was just a floor.

Do I see price falling further? Price touched a low of 25c and this is where we find the 138.2% Fibo line before closing at 25.5c. This could be another floor and should provide interim support. The MFI and RSI have been forming lower highs, suggesting a reduction in demand and buying momentum. However, they are both in negative territory now which could give pause to the selling momentum.

Would I sell now and take a 10% loss? Let us look at the weekly chart.

Since early June 2009 when the counter hit a high of 70c, trading volume has been declining as price retreated. As each floor (support) was broken, the trading volume became lower. The MACD has also been gently rising since mid December 2009 as price continued in its downtrend.

To talk about a reversal is surely early days yet but the signs are that further downside could well be limited. When all the would be sellers have sold, we could see a reversal of fortunes. In the meantime, a long term downtrend is still in force and this is not for the faint hearted.

So, I would not sell my small (money losing) stake in the company. Also, I tend to overlook counters which I am not vested in. Stay invested and I would continue to monitor the company.

Related post:
Raffles Education: A trading opportunity.

Raffles Education: Oriental Century to delist.

News of delisting of Oriental Century seems to have impacted the share price of Raffles Education negatively today as price closed at 28c on higher volume. That 28c support is still holding up perhaps shows that the bad news has already been factored into the price.

Although we could see price going lower once the news is digested by market participants, fundamentally, I do not see Raffles Education's numbers too badly affected since Oriental Century is really old news.

Despite today's somewhat higher volume, a picture of low volume pullback is still quite clear. Higher lows on the MFI and RSI also suggest underlying support in momentum. OBV does not show any signs of distribution.

If 28c breaks, the next support is at 26.5c. Immediate resistance is at 29c.

I would keep an eye on the technicals as this counter could still have a nice recovery story.

Oriental Century to liquidate, delist from SGX. As Oriental Century is insolvent with very limited resources, it will not be able to make any exit offer to its shareholders. Raffles Education holds 29.9% of Oriental Century.
Wednesday, 27 October 2010

© 2010 - The Edge Singapore

Raffles Education: Golden cross.

On 4 Oct, I mentioned that "it looks to me like a positive divergence is forming between the downtrend in price and the MACD.  As price formed lower highs, the MACD has been forming higher lows". This picture has not changed.  The positive divergence is still quite obvious.

Price has been moving in a tight range between 28c and 29.5c of late.  The declining 100dMA is adding pressure to resistance at 29.5c.  To move higher, the resistance provided by the 100dMA would have to be taken out decisively.  Could this happen soon?

The rising 20dMA which recently completed a golden cross with the 50dMA tells us that the shorter term price movement has an upward bias.  The 20dMA is still rising and seems on track to form a golden cross with the declining 100dMA next. 

Today, volume expanded as a doji was formed, a hint that a reversal could be on hand.  This happened as a higher low was formed on the MFI, suggesting strengthening demand, and the RSI shows a similar pattern, suggesting stronger buying momentum.

The Bollinger bands are squeezing and the channel seems to be pointing upwards.  If price does break through the 100dMA to move higher, it would meet with initial resistance at 31c.  This is followed by the eventual target of 34c.

Related post:
Raffles Education: A trading opportunity.

Raffles Education: A trading opportunity.

I have not done any trading for a long time.  Today, I took a look at Raffles Education's chart and it looks to me like a positive divergence is forming between the downtrend in price and the MACD.  As price formed lower highs, the MACD has been forming higher lows.  Last week, a higher low in price was formed.  This is a positive sign.

Look at the MFI and we see higher highs which suggest increasing demand. Look at the OBV and we see accumulation strengthening.  Look at the RSI and we see higher highs which suggest positive buying momentum.  These signs point towards a possible reversal of the downtrend.

Also, as price declined in the recent sessions, volume similarly declined which suggests that a classic low volume pullback is taking place. There is an absence of strong selling pressure.

Having said all these, immediate resistance at 29.5c has to be taken out convincingly.  If this is achieved, I see an eventual target of 34c (161.8% Fibo and also defined by the descending 200dMA) with some resistance at 32c.  Good for a trade? Perhaps.

Related post:
Raffles Education: Downtrend in force.

Raffles Education: Downtrend in force.

Raffles Education's downtrend continues. Distressed shareholders must be wondering if there is any end in sight. 29.5c is where we find the merged 20d and 50d MAs. This level was previously a support and is now resistance. Volume expanded as price drew to a close at 27.5c in the last session.

The MACD is declining in negative territory.  Momentum is clearly negative. After enjoying a brief period of accumulation from 26 July, distribution activity which started on 11 August has wiped out all gains in the OBV by the end of the last session.  Traders who were nimble enough to offload at 31c before the distribution activity took hold would have made a gain assuming they bought in at 29.5c.

Raffles Education's downtrend is in force and it would take a brave punter to try and make money trading this counter. Selling on rebounds is the strategy to adopt here, at least until there are clearer longer term reversal signals.

Related post:
Charts in brief: 16 Jul 10 (Part 3).

Charts in brief: 16 Jul 10 (Part 3).

LMIR: Although falling to 48.5c today means that price has fallen below the downtrend resistance drawn from the high of 11 Jan, price has been falling on lowering volume in the last few sessions.  This is comforting as it means a lack of distribution. This is confirmed by the OBV. 48.5c is resistance turned support for now.

NOL: $2 is an important resistance turned support formed by the merged 20d and 100d MAs. If this were to break, price could fall to $1.94 next. What looks like a symmetrical triangle has formed. Breaking to the downside would find initial support at $1.84, the 23.6% Fibo line which coincides with the 200dMA. Breaking to the upside gives an initial target of $2.22.

Raffles Education: Since hitting a high of 34c on 12 July, there has clearly been distribution activity as suggested by the declining OBV. Price is now supported by the 20dMA at 29.5c. The decline in price in the last few sessions has been accompanied by declining volume and this low volume pullback could be a chance for some brave punters. The MFI is still uptrending and if it were to bounce off its support, price could move higher once more.

SPH: OBV rising strongly, suggesting heavy accumulation. MFI bordering on overbought. MACD rising strongly in positive territory. All these as price closed at $4.08, the target I identified not too long ago. Volume is lower which suggests that price moved higher because there were lesser sellers.  People are probably waiting to see how high it can go.

Related posts:
SPH: BUY calls aplenty.
LMIR: Recovering for real?
Raffles Education: A spectacular white candle.
NOL: Downtrend.

Raffles Education: A spectacular white candle.

Volume expanded nicely as a wickless white candle was formed. Price broke resistance at 29c as provided by the 20dMA and closed at 32c resistance, provided by the 50dMA. Is this the extent of the upmove or would the price move higher? The RSI has been forming higher lows of late.  The MFI too.  Momentum and demand are positive in the short term but it could be a reaction to the oversold situation.  

If this is just a rebound, we could see the downtrend resistance at 33.5c capping further gains.  The MACD is rising but still in negative territory.  So, the possibility that this could be a short lived rebound cannot be discounted.

This counter has been in a downtrend since it peaked in Jun 09. Every single rally attempt was capped by downtrend resistance. Looking at the MFI over a longer period, we would realise that it has been forming lower highs since early this year. This affirms a longer term weakness in demand.  So, for people considering a punt, be careful.

We want to see volume expand more significantly, taking out 33.5c resistance, if a reversal should take place.  This would break out of the shorter term downtrend resistance.  Next resistance level would be at 35c then.