Sabana REIT: Touched 92.5c.

Sabana REIT touched 92.5c, the support provided by the 150% Fibo line, and I was there waiting with my overnight buy queue but not many lots were sold down at that price and I did not get any. It would seem that the selling pressure is finally easing off. Am I sure of this?

Look at the OBV and we would see a double bottom pattern forming. Distribution activity has definitely declined. Look at the candlestick formed today and we would see a dragonfly doji. Market participants tried to sell down the REIT only to see price recovering to where it started the session. The bulls are fighting back. All this happened on a day with higher volume. Encouraging.

What do I think would happen from now? Well, there is no guarantee that the REIT would not weaken in price but the selling is definitely less intense now. I am hazarding a guess that, everything remaining constant, 92.5c would be a strong support.

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Sabana REIT

First REIT: Waiting at 67c.

I was waiting at 67c, the long term support provided by the 200dMA, with my overnight buy queue but First REIT was just teasing me. It went to 67.5c and there it stayed. Market participants seemed quite happy to buy up at 67.5c which would provide a yield of 9.48%.

I was in LP's cbox and some asked me to consider buying the nil-paid rights instead since they were trading at 16.5c. Including the 50c to exercise the rights, the price is only 66.5c, 1c cheaper than the mother share's 67.5c. In fact, LP (the blog master of Bully the Bear) and JW (the blog master of Wealth Buch) both bought the nil-paid rights at 16.5c today. I will have to consider this suggestion. From the queues today, it would seem that there is relatively strong support for the rights at 16c. Getting the rights at 16c would mean a unit price of only 66c and a yield of 9.7%!

Now, why are the nil-paid rights being sold off so cheaply? I had an idea that there are probably some who do not wish to fork out more money to exercise the rights. However, JW's broker sent him an email and it mentioned: "First REIT - SGX is selling the rights for those who are not entitled to the Rights Units (Investors with Foreign addresses)". So, there are also some who are not able to accept and pay for the rights. It would seem that First REIT has many such investors. Would they be interested in buying some First REIT units to avoid dilution? They just might.

This REIT is definitely a strong buy at these levels.

Related post:
First REIT.