CapitaMalls Asia: Bought at $1.37.

Similar to Capitaland, I am still waiting for a technical rebound in the share price of CapitaMalls Asia before reducing exposure. The counter is dreadfully oversold and a technical rebound is probably overdue. However, in extremely bearish circumstances, a counter could stay oversold for a very long time. As always, a huge dose of luck is required.

Today, I bought more shares of CapitaMalls Asia at $1.37 per share. Why? Is there a positive divergence? Nope. So, why am I buying when there is no reversal signal? The same reason why I bought more shares in Capitaland and if you remember, price went lower the next day. So, will price move lower tomorrow for CapitaMalls Asia? Your guess is as good as mine.

From the ADX, it is obvious that CapitaMalls Asia is in a downtrend and the trend is strengthening too. If we look at the MACD, it is set to form a lower low. However, if we connect the two earlier lows, the MACD could have hit support. As if to support this thesis, price action almost formed a white hammer today. On the back of high volume, price formed a doji as it closed at the day's opening price of $1.40 after hitting a low of $1.36.

After such a rapid and steep decline in price, the rebound could be equally forceful. We could perhaps see gap cover at $1.55 in such an instance. This would also approximate the position of the declining 20dMA. Wish me luck.


Daryl Guppy: A different reality in China. Despite the much-anticipated hard landing, bubble bursting and general collapse in China, the reality is a little different. The China market fills the growth gaps left by the US market for those companies smart enough to work in the Chinese environment, and meet the growing demands of Chinese consumers. This demand is fuelled by mandated wage increases and the structural shift towards a domestic consumer economy.
The EDGE, 20 June 2011.




Related post:
CapitaMalls Asia: Daily versus Weekly.