Ever since the CPFB introduced a colorful pie chart of our CPF savings a few years ago, I would look forward to mine every year like a teena...
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The STI closed 1.8% higher and recaptured the 3,000 points support. Whether 3,000 points is now support once more, actually, needs confirmation. It is too early to say that we are out of the woods.
As most of my investments in the stock market are not index linked counters, I am not too bothered by the STI apart from the possible spillover effects it could create.
1. AIMS AMP Capital Industrial Trust: My buy queue at 20c was not filled. I am continuing the buy queue at 20c for next Monday. Although price closed at 20c today, most of the 8,840 lots transacted today were Buy Ups at 20.5c, 6,913 lots to be exact. 20c is a very strong support both technically and fundamentally.
2. Cache Logistics Trust: I am still waiting to buy this at 92.5c. It did touch 92.5c recently but my Buy order was not filled. So, am I going to buy at a higher price? Nope. I will continue to wait at 92.5c since technical weakness is still apparent.
3. CapitaMalls Asia: Closed 1c higher. Technically very weak. See if it captures support at $1.83. The counter closed at $1.77.
4. First REIT: For anyone who is seeking exposure or increasing the weight of his long exposure to this REIT, 72c support has held up and could be a fairly safe entry. However, if 72c breaks, the next support is at 69c. If a possible 3c paper loss is acceptable, why not?
5. Genting SP: Similar to CapitaMalls Asia, this counter must capture its previous support in order to set investors' minds at ease. That would be at $2.00. The counter closed at $1.95.
6. Golden Agriculture: Regained support at 63.5c. This needs confirmation in the next session but it is a shot in the arm for investors. Closing below support recently could just be a whipsaw.
7. Healthway Medical: Closed at 14c which was support. This could now be resistance. Technically and fundamentally weak, I would only go long on this counter for quick trades for now which is what I have done before.
8. Saizen REIT: Buy ups at 16c happening. 15.5c remains a very strong support, technically, and is a fairly safe entry price for any interested investor.
9. ASTI: I increased my long position and I shared this on Twitter yesterday. EPS: 2.6c. NAV: 18c/share. Dividend: 0.7c/share. I bought more at 10c/share. It was my only "update" yesterday in my blog. If you are not following me on Twitter yet, you might want to do so for my short "blogs".
OK, hungry for dinner now after an afternoon nap, recovering from hours on the beach. Have a wonderful weekend! :)
On 19 September, I mentioned that "NRA has a target price of 21c for ASTI. That is a 100% upside from my entry price of 10.5c. Nice but I see resistance at 12c which was tested several times in recent months. It is, however, also interesting to note that we might be seeing the formation of an ascending triangle here with 12c being the top of the formation."
Immediately the next day, "12c resistance was weakened as price briefly touched 12.5c before ending the day at 12c. This means that 12c is still resistance and we need to see if it could be taken out in the coming sessions." and I asked "should my friend buy some shares of ASTI at 12c? Buying at 12c would be buying at resistance. Not a very good idea."
In the last session, ASTI's share price closed at 10.5c on very low volume. To me, it seems as if the counter is doing a classic low volume pullback. If we draw trendlines connecting the highs of 11 May and 20 Sep as well as the lows of 25 May and 2 Sep, ASTI's share price is clearly in an up channel. In the last session, the closing price of 10.5c was right smack on the channel support.
We have a sell signal on the MACD histogram and the MACD has been forming lower highs, calling for caution. The OBV is, however, showing no signs of active distribution and, in fact, the picture of continual accumulation is very much intact.
ASTI would be announcing 3Q results soon in the first two weeks of November, next month. With improving fundamentals, 3Q should turn out to be quite satisfactory. To recapt, EPS for the half year ended 30 June 2010 was at 1.31c and NAV/share was at 17.75c. I like how ASTI has been repaying bank loans which resulted in the lowering of financing costs year on year by 81.8% from $1.2 million (2Q2009) to $0.2 million (2Q2010). Its gearing now stands at only 8%.
ASTI paid out a dividend per share of 0.5c to 1.1c between 2005 to 2007. This translates to a yield of 4.76% to 10.48% based on the last done price of 10.5c per share.
Buying more at 10.5c seems like a good idea, given the improving fundamentals and the benign technicals.
ASTI's share price tried unsuccessfully in earlier sessions to stay above the 12c resistance. Today, share price closed at 11c amid weakening technicals. The MACD just completed a bearish crossover in positive territory. RSI is testing support at 50% which suggests weakened buying momentum.
11c is where we find the rising 50dMA. A stronger support would be at 10.5c which is where we find the rising 100dMA which coincides with the uptrend support line. I believe that the fortunes of the semi-con industry would continue to improve and would, therefore, accumulate if ASTI's share price should retest support at 10.5c.
A friend called me and asked if it is too late to buy some shares of ASTI. Yesterday, I said "I see resistance at 12c which was tested several times in recent months. It is, however, also interesting to note that we might be seeing the formation of an ascending triangle here with 12c being the top of the formation. If the resistance at 12c is taken out, I see immediate resistance at 13.5c with a near term target of 15c." Today, 12c resistance was weakened as price briefly touched 12.5c before ending the day at 12c. This means that 12c is still resistance and we need to see if it could be taken out in the coming sessions.
So, should my friend buy some shares of ASTI at 12c? Buying at 12c would be buying at resistance. Not a very good idea. However, the very high volume today which accompanied the buy ups is encouraging. Of the 20,050 lots that changed hands, 15,573 lots were buy ups. 10,369 lots were bought up at 12c. Could this momentum continue? Let's look at the momentum oscillators for clues.
The MFI has formed a higher low. So has the RSI. The MFI is just going into overbought territory while the RSI has spiked into overbought territory. OBV has also spiked upwards. Demand is rising. Buying momentum is strong but overdone. Accumulation is in full swing. Overall picture looks good. There is a good chance of a follow through and if it happens, we could see 13.5c tested. Otherwise, supports could be tested once more. It would be safer to buy in then.
I recently bought some shares of ASTI Holdings Limited. This company is engaged in the provision of solutions and technologies in the backend (ie assembly, test and finishing) arena of the semiconductor industry as well as the distribution of electronic components and products plus the provision of semiconductor application in consumer electronics, computer peripheral and communication solutions. The description of ASTI's business is taken from its homepage.
Anyone who knows me well would be somewhat surprised at this move of mine since I am not in tune with high technology at all and IT is as Greek to me as, well, Greek. However, I am not a hermit and I do keep in touch with the real world. There is much news of how the cyclical demand for semiconductors has been ramping up and that this momentum has yet to run its course.
I read an article in The Straits Times (22 Aug 10) by Tan Ai Teng on why tech stocks are a good buy then:
1. Tech stocks are in a period of strong earnings recovery.
2. The second half of this year would have been stronger if not for a shortage of components.
"I am bullish on the semiconductor equipment related business. According to Semiconductor Association's (SEMI) forecast, global semiconductor equipment sales are expected to climb 104% this year... and rise a further 9% next year."
Since I am so unfamiliar with tech stocks, I was wondering which company's shares offer good value. As luck would have it, I read an article in Next Insight where NRA reported on Innotek and ASTI. Both companies seem promising. However, Innotek's share price has appreciated enormously while ASTI seems like a laggard.
The following factors drew me to ASTI:
1. A share price of 10.5c then with a PER of 3.8x and NTA/share of 16.9c.
2. Improving balance sheet with its gearing level falling from 22% to 8%.
3. Gross margin (GP) expanded from 7.1% to 22% year on year.
As per my usual style, I looked at the chart to find a fair entry price. ASTI bottomed in late November 08 with price touching a low of 4.5c. It made a higher low of 6.5c on 16 March 2010. It broke above the 200dMA in April 2010 and has been trading above this MA since. Using candlesticks and the 200dMA as references, strong support at 9c is spotted. Seeing how the 20d, 50d and 100d MAs are bunching together at around 10.5c, however, I decided to buy some at 10.5c as a hedge. Price might or might not retest support at 9c. If it does not, I'm already in. If it does, I would buy more as the uptrend is intact. Looking at the OBV, it is obvious that there is longer term accumulation going on and once all the sellers are done selling, the share price could rise.
NRA has a target price of 21c for ASTI. That is a 100% upside from my entry price of 10.5c. Nice but I see resistance at 12c which was tested several times in recent months. It is, however, also interesting to note that we might be seeing the formation of an ascending triangle here with 12c being the top of the formation. If the resistance at 12c is taken out, I see immediate resistance at 13.5c with a near term target of 15c. Over a longer term, we could even see 17.5c, a support level which broke in early 2008, tested. Of course, in extremely bullish circumstances, prices could go parabolic in which case all resistance levels identified could be destroyed like butter cut by a hot knife. Then, it would be time for me to let go and run for the hills.
Overall, ASTI looks rather promising. Wish me luck. :)
This video describes how the semiconductor industry may experience shortages due to capacity constraints, increased demand, and low inventory levels (June 14, 2010):
P.S. I am having trouble saving charts from ChartNexus in Lim&Tan. So, I am unable to put up the chart for ASTI here.
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