Is SPH the bluest of them all?

Some readers are disturbed by my write up on F&N and Keppel Corporation yesterday.  Well, if I had long positions in those counters at this point in time and if the positions were big and if they were bought at recent highs, I would be disturbed too.  Would they become blue black chips?

So, are there no bastions of strength left, seeing how F&N and Keppel Corporation are in precarious positions?  Aren't blue chips supposed to be the strongest of them all?  Well, the color blue ranges from a very light baby blue to a very dark midnight blue.  Things are always relative, remember?

I have mentioned quite a few times in my blog and elsewhere that my favourite blue chip has been SPH for quite some time.  I like their core business.  I like the Paragon building.  I like how they have diversified into property development.  I like their relatively high NAV.  I like their relatively low PE.  I like their current assets.  I like their relatively generous dividend payouts. Relative?  Relative to other blue chips, that is.  I also like the fact that Dr. Tony Tan is at the helm.  So, the fundamentals are good.  What about the technicals?

Technically, SPH is less volatile compared to Keppel Corporation and is more similar to F&N.  SPH is very comfortably positioned in its uptrend. Unlike F&N and Keppel Corporation which are both hanging onto their trendline supports for dear life, we see SPH forming a white spinning top in the last session, closing at $3.70.  Trendline support which I have drawn in orange is at $3.59 thereabouts.

The white spinning top looks like it's setting up for a possible morning star formation.  Sounds familiar?  Price will have to open above $3.72 and close higher in the next session for this to be valid.  I have drawn a trendline resistance in brown color.  This connects recent highs.  Any move up in price should meet with resistance provided by this trendline, currently at $3.76 or so.  Not much upside?  Looks like it.

What about the downside?  I am not delusional.  I do not think that SPH is immune to negative sentiments. The MFI continues to decline and at 35%, it is not oversold yet.  The index has been forming higher lows and if we connect these lows, we see a gently rising support line.  The probability is greater for the buying momentum to continue weakening towards this line.

As buying momentum weakens, a decline in price might see the orange color trendline support tested.  That would be a nice level to buy some.

SPH is my single largest investment in a blue chip company for a few months now.  I am in no hurry to divest and would in fact buy more as it weakens to support.