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.

Related post:
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.

Healthway Medical: Broke out of resistance.

On 29 Nov, I mentioned that "I am wary of being whipsawed out. With the MACD hugging the signal line, this counter could go either way. However, with a picture of low volume pull back intact, comparing the high volume sell downs in mid October, when support at 16c was broken, to the current thin trading volume, the suggestion is that most of the weaker holders have been shaken out."

Healthway Medical has been seeing some buying interest in the last few sessions. Today, price broke out of resistance provided by the declining 20dMA at 15c and closed at 15.5c with 1,504 lots bought up at 5.05pm. A total of 13,794 lots changed hands today. If the buying interest follows through, we could see its share price rising to test resistance provided by the merged 100d and 200d MAs and that is at 17c.

It would seem that the positive divergence observed in the recent past is playing out nicely.

Healthway Medical Corp, which runs medical and dental clinics in Singapore and China, is speaking to potential investors who have expressed an interest in taking a stake, a company executive said.
Friday, 10 December 2010

© 2010 - The Edge Singapore

Related post:
Healthway Medical: Support at 15c broke.

AIMS AMP Capital Industrial REIT, First REIT, Golden Agriculture, CapitaMalls Asia and Sabana REIT.

AIMS AMP Capital Industrial REIT: For some time now, I keep saying that this REIT is undervalued. A reader sent me a little snippet from Kim Eng and I would like to share it here with everyone:

One of few undervalued players around. AA-REIT is still trading at a 20% discount to book even after a steep $41m write‐down in the value of its investment properties in FY Mar10. The capital values of industrial properties in Singapore have since recovered from the global financial crisis. AA-REIT’s gearing ratio is comfortable at 35%, with no near‐term refinancing need. Any further write‐down is unlikely. That AA-REIT is still trading at a discount to its peers is likely due to its relatively small market capitalisation and turbulent history in 2009 which saw AMP Capital Investors and AIMS Financial Group emerging as Manager after a major equity cash call and asset injection.

Near‐term catalyst. Asset enhancement opportunities abound for AA-REIT as at least half of its 26 properties have plot ratios that are under-utilised. Capital recycling exercise is ongoing and the potential sale of its single asset in Japan could be a near‐term catalyst.

Technically, we could see the unit price of this REIT trading sideways for a few more weeks with support at 21.5c and resistance at 22.5c. It seems that a symmetrical triangle is forming and it would not surprise me if its unit price trades higher in 1Q2011. I bought more recently at 21.5c and I am in the queue to buy more.

First REIT: I bought some First REIT units at 69c today. This gives me a yield of 9.28% based on the annualised DPU of 6.4c for 2011.  The next support level is at 67c which is where we find the rising 200dMA. Going by the trading volume in the last two sessions as long black candles were formed, we could see 67c tested in the next session. I have entered my buy queue. Why am I so bold? Fundamentally, this is a REIT with a strong track record. Technically, buying at supports in an uptrend is the way to go.

Many could be holding off their purchases in spite of the attractive yield at current price levels. If my guess is correct, they are probably conserving their resources to apply for as many excess rights as possible. Why buy at 68.5c if we could get excess rights at 50c? They should remember, however, that how many excess rights we are likely to get depends probably on how many mother shares we hold in the first instance. Those who fail to get the excess rights they want could cause a strong bounce upwards for First REIT's unit price once the rights exercise is completed.

Golden Agriculture: Its price continues to defy gravity as it rose on low volume to break the previous high of 78.5c to close at 79c. Volume is the fuel which drives a rally. I question the sustainability of the recent levitation act. Of course, Mr. Market is always right and I could be proven wrong this time round and if it does happen, it won't be the first time.

Immediate support in case of a pull back is at 74c and I see strong support at 70c. The MACD has formed a lower low and it remains to be seen if it would form a lower high. The negative divergence between rising price and falling volume is still valid. However, the rising MFI and RSI show that momentum is positive and support is strong. Any pull back is probably a good opportunity to accumulate.

CapitaMalls Asia: Price closed lower at $1.92 on higher volume. All technicals point to a high probability of price moving even lower in the near future. Any rebound, however unlikely, would be a chance to reduce exposure. For shortists, rebounds could be salivating opportunities for them to make some money here.

Closing at $1.92 is at support provided by the 138.2% Fibo.  38.2%, being one of the 3 golden ratios, is quite strong and if it breaks, the other 2 golden ratios are 50% and 61.8%.  The 150% Fibo and 161.8% Fibo lines are at $1.88 and $1.85 respectively. If the selling pressure keeps up, we could see prices go to those levels. Then, I would be sorely tempted.

Sabana REIT: Closing at 93.5c is exactly where I mentioned that 138.2% Fibo line would be providing support. Selling pressure is not letting up although volume has reduced on this down day. It recorded the second lowest daily volume since the REIT started trading.  This should be a relief for unit holders.

Could it really test the 150% Fibo line at 92.5c? Your guess is as good as mine but that is where I have entered my BUY queue. Wish me luck.

Related posts:
AIMS AMP Capital Industrial REIT, Golden Agriculture, Sabana REIT.
First REIT
CapitaMalls Asia