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Nice little up day for the STI. I am staying defensive and waiting to see if the support at 2,780 holds. Global stock markets' almost relentless climb upwards is experiencing a few much overdue stumbles and falls. Before the markets go higher, they could go lower.
CapitaMalls Asia: Another up day as price closed at $2.16. MACD continues rising in negative territory. MFI is rising towards 50%. OBV is rising. However, the negative divergence between volume and price movement is glaring. As price rises, volume decreases. The volume should ideally increase in order to have a sustainable move up in price.
$2.19, the bottom of the base formation in February is likely to be a strong resistance. If we use the exponential 50dMA, we see something very interesting. It is at $2.19.
The Exponential MA, or EMA for short, has more weight given to more recent data. This is useful when we want to gain some insight into shorter term psyche of market participants as more recent price movements are fresher in their collective memories. Will CapitaMalls Asia test $2.19? That, I do not know but I know I would be 100% divested if it does as the technicals favour further weakness. I believe that short sellers would find $2.19 almost irresistable.
SPH: On Monday, it closed for first time in a long time below the 100dMA. Today, the attempt to recapture the 100dMA support failed. I would wait to see if the 200dMA is tested and if it holds in such an instance. The 200dMA is currently at $3.70. If the 200dMA holds, I might buy some.
LMIR: I am taking a longer term view with this counter. I continue to like its high yield and low gearing. In the shorter term, there is no question that it is bearish even though the weakness is on relatively low volume. I am looking at its weekly chart to gain insights into its longer term technicals.
It would seem that 47c is an important support provided by candlesticks and the rising 50wMA. OBV is more or less static which, to me, suggests that most unit holders are long term investors. The MFI has been forming lower highs and is currently at 50% which could act as support. Would I buy at 47c? As a hedge, perhaps. I won't throw in the kitchen sink because the lower highs in price since 11 January this year give me a feeling of unease. 44c, anyone?
Saizen REIT: The recent report by Saizen REIT's manager seems to have reassured investors and although we are not seeing any enthusiastic buying up, we are not seeing any desperate selling either. Fundamentally, there is increasing recognition that this REIT is heavily undervalued.
I mentioned before that the descending 100wMA is exerting some downward force on the price of this REIT and it was at 17c last week. This week, it is lower and approaching 16.5c. If we look at the weekly chart, we see that the resistance provided by the100wMA has been challenged. This happened yesterday.
The rising 20dMA and 50dMA should inevitably form golden crosses with the descending 100wMA. Fibo line projections show 150% at 20.5c and 161.8% at 21c. These would be my immediate targets in a breakout scenario.
Related posts:
SPH: Another black candle day.
LMIR: 1Q 2010 results.
Saizen REIT: 3Q FY2010 results.
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