Investing in Starhub at the right price?

My investment in Starhub has turned out to be a bad one.

However, I am not losing sleep over this.

Why? Is it because I am on anti-depressants?

Hey, don't be so like that lah.

I stop taking those pills a long time ago.






I am quite ZEN about the paper loss really because my investment in Starhub is very small especially in comparison to my investment in SingTel which has been, of course, my preferred local Telco to invest in for quite a while now.

To give you a rough idea, the market value of my investment in Starhub is less than 2% the market value of my investment in SingTel.

Although I have been adding to my investment in SingTel as its share price declined in recent months, I have not added to my investment in Starhub even as its share price plunged.

Why is this so?

SingTel has a stronger balance sheet, stronger free cash flow and it pays out a fraction of its earnings as dividends to shareholders.

Starhub, on the other hand, has seen its free cash flow declining in recent years and it pays out much more than its free cash flow as dividends to shareholders.

Although Starhub has cut DPS from 20c to 16c, I think, if the management is financially prudent or unless business improves dramatically however unlikely, DPS should be cut again.




I did the numbers some time back and again more recently. I now feel that a more sustainable DPS could be 10c, assuming things do not get much worse.

So, if we choose to invest in Starhub today for income, we should ask ourselves if a DPS of 10c would make us happy?

I received quite a few messages from readers regarding Starhub recently. Examples:

Assuming that Starhub pays all of its cash flow to shareholders as dividends, I feel that it behaves very much like S-REITs.

Hanging on to that idea, if we can get a dividend yield of 7% or more from Starhub which is probably comparable to what we can get from industrial S-REITs, it is not too bad a deal.

Assuming a lower 10c DPS, even at $1.70 a share, we are looking at a dividend yield of 5.88% which doesn't quite cut it for me even with this new perspective.




Investing in Starhub for income?

Closer to $1.40 a share could be a more reasonable price to pay, I feel.

At $1.40 a share and assuming a more sustainable DPS of 10c, dividend yield would be 7.14%.

What if $1.40 does not happen?

No problem because I would rather invest in SingTel at the current price than to invest in Starhub at the current price, everything taken into consideration.





Looking at the chart, the RSI shows that Starhub is very oversold but like the MACD, the momentum oscillator does not show any sign of a trend reversal.

Although Starhub's share price plunged 5% (- 9c) today to $1.67, we could see it going lower if Mr. Market shares my sentiments.

Things could get worse before they get better.

So, why have I not been adding to my investment in Starhub?

Alamak. I anyhow talk to myself only lah.

You blur? I also blur.

Avoiding the instant gratification of yield (SingTel, Starhub and REITs).

My blog has pretty useful content in the comments section but many do not read the comments section, I found out a long time ago. 

So, there was a time when I would share the comments in a blog post so that they reach more people. I stop doing that after I found out that Google didn't like it and it affected my blog's page ranking. 

However, I have decided that it really should not matter to me and that making sure that the content reaches more people is more important. 

This was a recent conversation:

redponza said...
Hi AK,
There is a 4th telco getting into Singapore, don't you worry about the intensified competition?

Also, unlike REIT where there is minimum capital expenditure, telco needs to upgrade their network consistently to maintain competitiveness. With the lower yield, and meh growth potential, not sure why it is better than REIT.

In the telco space, isn't Starhub better with a much higher dividend yield?

Thanks.



AK said...
Hi redponza,

SingTel derives less than 20% of its revenue from Singapore. It is truly an MNC.

(Added on 21 Aug 17. Reader:
I look at Singtel's annual report. I can't derive the 20%. It is 40+ % to my calculation. How did u derive it? 

AK:
Well spotted. I meant to say its Singapore mobile business which is, of course, what would probably be impacted by the entry of a 4th Telco next year. That business segment accounts for 13% of SingTel's total revenue.)

As for CAPEX, selling away most of its stake in Netlink NBN passed a heavy baby to other investors. SingTel retains only a 25% stake in the newly listed entity.

If you are worried about the 4th Telco and increased competition in Singapore, you should be more worried about Starhub.

This is also probably why Mr. Market demands a higher dividend yield from Starhub which incidentally also has a higher payout ratio compared to SingTel.

One more thing, we really shouldn't be comparing Telcos with REITs. The yields are not comparable.

SingTel pays out a percentage of its earnings as dividends while REITs pay out from their operational cash flow.

If we were to use the same yardstick for both, we would worry about REITs since their DPU is usually higher than their EPU.





redponza said...
Is telco attractive?

From my point of view, return = dividend yield + dividend growth, taking debt into consideration.
There is lower growth and lower yield in telco, thus I am puzzled why telco is even considered in the first place.

And from a price to book standpoint, they can never beats a REIT =.=

But on the other hand, I saw famous investors grabbing telco companies, hence I must be missing sth here?





AK said...
Hi redponza,

Like I said, they are different animals.

It depends on how we look at investments and how value is created.

Most REITs pay out more than they earn. They do not retain any earnings.

SingTel pay a percentage of their earnings and they retain some earnings so that they become more valuable over time.

I like some REITs and my portfolio is rather heavy in REITs. So, it is sensible to become less dependent on REITs especially when conditions have become less benign for them.

It is about having a more holistic approach.

Frankly, not all REITs are good investments.

We should wonder at the sustainability of distributions.

A REIT could have high CAPEX down the road:

http://singaporeanstocksinvestor.blogspot.sg/2015/08/is-keppel-dc-reit-attractive-investment.html

A REIT could see their assets disappear in the not too distant future:

http://singaporeanstocksinvestor.blogspot.sg/2017/03/viva-industrial-trust-more-attractive.html

So, we must be careful when we lump REITs together to say that REITs can never be beaten in terms of return on investment. The quality of returns and the sustainability are pertinent considerations.

To new readers of ASSI, please read related post #1 below.

Related posts:
1. Instant gratification of yield.
2. SingTel and Netlink NBN Trust.

2016 full year passive income from non-REITs (Part 1).

During an "Evening with AK and friends", someone asked if I was going to sell my stocks as market guru Hu Li Yang was expecting a stock market crash. I said we should stay invested as the market was still awashed in liquidity and money will go to where it is treated best. See: Evening with AK and friends.



So, what did I do in 2H 2016 in the non-REITs space? I made various purchases but, mostly, I was buying DBS shares. Besides DBS, I also bought some shares of OUE Limited, PREH, Wilmar, OCBC, Breadtalk and Starhub.

(I am impressed by DBS' cost management. Their cost to income ratio keeps declining.)

The narrative for investing in OCBC was similar to the one for DBS. Although all three local banks' stocks looked cheap to me, my preference was for DBS because of the perceived cheaper valuation.


The reason for me putting some money in OCBC's stock was mostly because my long position in DBS grew so big (and I do mean BIG) that it was prudent for me to step on the brakes. 




Using a strategy I employ frequently for stocks which I am highly confident in, my relatively large position in DBS included both a core position for income as well as a trading position.

Why not UOB? 


Well, I think UOB has been a bit laid back. I am not saying that it is a bad thing, mind you, but its growth story seems less exciting.

Of course, some might say that DBS and OCBC have been more "adventurous" but I like to think that they are more enterprising.

I feel that growing their wealth management business more aggressively will continue to set them apart from UOB as that business contributes more and more to their earnings.

Next, Wilmar. I continue to like Wilmar's business strategy and their very impressive scale of operations. It is an amazingly complex business and, to be quite honest, I have no way to analyse most of its operations.

However, when Mr. Kuok thinks their shares are cheap and bought more at $3.00 a share, that was a pretty clear signal to me. At that price, we would also be buying at around its NAV which seems conservative.

Source: RHB.

Having accumulated a rather significant long position in Wilmar in recent years, I am quite happy to wait while being paid to do so.

Now, for OUE Limited. I blogged about my rationale for increasing exposure to OUE Limited when I shared my numbers for 1H 2016 (see related post #1). Back then, I added at $1.51 a share. In 2H 2016, I added more at $1.53 a share.

Twin Peaks.

My decision to increase exposure was mostly driven by the even larger discount to NAV from the time I initiated a long position. 

There is much value in OUE Limited but waiting for value to be unlocked requires a lot of patience. Well, remember, a wise man did say before that the big money is in the waiting.

Along similar line of reasoning, I also added to my investment in PREH at 80c a share a few days ago. This is the lowest price I have ever paid for PREH. The last time I bought any PREH shares was more than a year ago. 

It is interesting to me that Mr. Ron Sim, Mr. Pua S.G. and Mr. Kuok K.H. have been increasing their stakes in PREH on price weakness. 

PREH is an asset play but it is also a growth story. It is not for the faint hearted.

PREH

As for Breadtalk, I have a more recent blog post on my decision to initiate a position. I compared it to Old Chang Kee and QAF Limited, both of which I have been a shareholder of for many years. 

If you are interested to know why I had a change of heart and decided to initiate a smallish long position in Breadtalk, go to the related posts at the end of this blog post (see related post #2).

Starhub. In June last year, when I did a technical analysis for Starhub, I said:

"The widening of the Bollinger Bands indicates increased volatility. The OBV shows selling pressure. The MACD is declining and shows no sign of a positive divergence. These are all on the weekly chart which suggests that continuing weakness in the longer term should not surprise us." Read blog post: here.


We saw Starhub's stock price sinking and I nibbled  again in late November. I feel that Mr. Market is right to be concerned but might be overly pessimistic about Starhub's prospects with the introduction of a 4th telco.

There is plenty of speculation now but, to be realistic, it will take time for the new entrant (which is expected to enter the market in 2018) to gain traction and it remains to be seen how successful it will be.




Back in June 2015, I also said that SPH and Starhub were similar:

"They could see earnings come under pressure for different reasons but that makes them similar too as the challenges are very real.... I would like to have some buffer in terms of dividend yield buying into SPH and Starhub because I am investing in them primarily for income and not growth." Read blog post: here.

I believe I am getting a much thicker cushion buying Starhub at under $2.80 a share and that was what I did.

As for SPH, let me share here a recent conversation with a reader:

I have been a SPH shareholder for many years and I am happy enough to be paid while I wait.
---------------------
As this turned out to be a very long blog post, I chopped it up into two parts. Read Part 2: HERE.
Related posts:

1. 1H 2016 income from non-REITs.

2. Breadtalk, OCK and QAF.

3. Made $1m investing for income.
4. 2016 FY income from S-REITs.

BREXIT and 1H 2016 income from non-REITs.

Were there any major development in the non-REIT space for me in 2Q 2016? 

Selling most of my investment in NeraTel probably qualifies. I sold about 90% of my investment in NeraTel. 

Being a relatively substantial part of my investment portfolio, the sale, as you might have guessed, bumped up the cash level in my portfolio by quite a bit.

A happy problem?

In the short term, with the divestment gains, it is probably a happy problem but if I do not put the money to more productive work, we would have to remove "happy" from the phrase. So, I put some of the money to work.

In the non-REIT space, in 1Q 2016, some readers might remember that I bought DBS, DBS and more DBS. Even now, DBS is trading at a discount to NAV and a relatively low PE ratio of about 8x. Paying out about a third of its earnings as dividends, the yield is almost 4%. 

Thanks to BREXIT, I was able to add to my investment in DBS as its share price declined, breaking a technical support. I would like to collect more on any further weakness.

In 2Q 2016, I also added to my investments in Starhub, VICOM, QAF Limited and Croesus Retail Trust on lower prices offered by Mr. Market.

Investing for income, I am interested in entities which have strong income generating abilities. Of course, they must pay meaningful dividends.


A handful of readers asked me for my thoughts on Croesus Retail Trust's proposal to be internally managed. It is quite interesting since it would be the first investment trust to be internally managed in Singapore if the deal is accepted by its unitholders.

All else remaining equal, internal management is a good thing for Croesus Retail Trust as it would mean that profits which would have gone to the external manager could be distributed to unitholders instead. The probability of conflict of interest between an internal manager and the unitholders will also be lower.

Of course, an external manager of any investment trust is a profitable enterprise, earning regular fees. No external manager in his right mind would give this up for a song. The price to internalise Croesus Retail Trust's manager is set at a princely sum of S$50 million.

For FY2015, the external manager recorded earnings of about S$500,000. Paying S$50 million to internalise the management would mean paying a PE ratio of 100x. Comparatively, ARA which manages a portfolio of REITs like Suntec REIT is trading at a PE ratio of about 15x. Go figure.

Although I like the idea of an internal manager for Croesus Retail Trust, I think paying S$50 million for this would be a price too high.

Post BREXIT, I also added to my investment in OUE Limited which I first blogged about in 2014 as a possible asset play. I basically paid 50c for what was worth $1.00. It was a smallish position as I was wary of the situation with Twin Peaks condominium. See my past analysis: here.

I decided to add to my investment because the situation with Twin Peaks has improved with many more units sold but the stock traded at an even bigger discount to NAV. While waiting for value to be unlocked, I will get some pocket money from the regular dividends OUE Limited declares.

Very much along the same line of thought, I decided to also increase my investment in Wing Tai Holdings. Although they have much more exposure to development properties compared to OUE, they have a stronger balance sheet. Mr. Market could be overly pessimistic. See my past analysis: here.

In 2Q 2016, I received income from:

1. APTT
2. ST Engineering
3. SPH 
4. PREH
5. QAF Limited
6. Wilmar
7. ARA
8. Hock Lian Seng
9. SCI
10. SMM
11. OUE Ltd
12. Hong Leong Finance
13. DBS
14. NeraTel
15. Accordia Golf Trust
16. Croesus Retail Trust
17. Starhub
18. Ascendas H-Trust


I hope I have not missed out anyone.

Total income received from non-REITs in 1H 2016:

S$ 58,545.01

That is about S$ 9,757.00 a month.

I will continue to nibble at stocks and if a correction in the magnitude of 10% or more should happen, I am prepared to buy much more.


Related posts:
1Q 2016 income from non-REITs.

9M 2015 passive income from non-REITs.

Some wonder if Mr. Market could go into a depression? I don't know but I do know that many stocks became much more attractively priced in the last three months.

Consistent with my strategy to diversify my portfolio to reduce reliance on S-REITs for income, I added to my long positions in the following as their stock prices declined more significantly recently:

1. Accordia Golf Trust

2. Ascendas Hospitality Trust

3. ST Engineering

4. Starhub

5. SembCorp Industries

In the last three months, I also initiated long positions in the following as investments for income:

5. VICOM
"A 15x PE ratio would give us a fair value of $5.36 or so per share."

6. Religare Health Trust
"Trust has demonstrated its ability to improve its revenue organically quite strongly which makes up for the expiration of the sponsor's waiver to their share of the distributable income."

7. King Wan
"King Wan is in a net cash position and it also has an order book that would provide earnings visibility until 2018."

Finally, I accumulated the following stocks which have a bit of an income investing angle but the main reason is because I think they are worth much more and at lower prices, they became even more attractive:

8. Wilmar

9. OUE Limited

If you should be interested, you could search ASSI for more of my blog posts on these stocks and why I decided to add them to my portfolio when I did.

Of course, stocks could stay undervalued for a long time but regularly receiving some dividend in the meantime makes the waiting more palatable. I like to be paid while I wait.

If you suspect that I have dipped into my war chest in the last three months, you are right. 

Could we see another big decline in the stock market? We could and we should be ready. So, being cautious, I have not exhausted my war chest.

I have a couple of fixed deposits maturing next month in October and I will probably be keeping the money close at hand instead of putting it in another fixed deposit or two.

In Q3 2015, the following non-REITs paid dividends:

1. SATS

2. Old Chang Kee

3. APTT

4. SingTel

5. SCI

6. SMM

7. Wilmar

8. NeraTel

9. ST Engineering

10. QAF Ltd.

11. Starhub

12. HongLeong Finance

13. Croesus Retail Trust

For the first 9 months of 2015, total passive income received from non-REITs: S$ 57,747.59. 

This works out to be S$ 6,416.40 per month.

Have a shopping list and be ready to pounce if Mr. Market becomes depressed.

Related post:

6M 2015 passive income from non-REITs.

Starhub: A nibble at $3.85 a share.

Friends would remember that I looked at possibly investing in Starhub a couple of years ago but its high level of borrowings frightened me.

Of course, Starhub has chugged along quite nicely since then and it was only later that I discovered how its very predictable and strong cashflow was able to accommodate its high level of borrowings.

So, I have been waiting for a chance to get some since...

Starhub's stock price plunged today, hitting a price (of $3.70 a share) not seen since late 2012. The big movement downwards was unexpected, of course, although the charts show the 150% Fibo line to be at $3.70, a golden ratio and supposedly a strong support.

I was more expecting a slow drift downwards in price and thought I could, perhaps, buy if the share price hits the 200 week moving average (200W MA) which is currently at $3.87. This is a long term support and should be quite strong.

So, looking at the chart when its share price had already recovered from $3.70 to $3.85, I wondered what to do because breaking the 200W MA is a bearish signal.

The widening of the Bollinger Bands indicates increased volatility. The OBV shows selling pressure. The MACD is declining and shows no sign of a positive divergence. These are all on the weekly chart which suggests that continuing weakness in the longer term should not surprise us.

In the near term, however, share price could rebound as they sometimes do. In fact, the higher low on the MACD in the daily chart suggests that this is a distinct possibility. Such a big one day movement in price should have attracted short sellers and shorts have to be covered eventually.

In terms of fundamentals, it won't be wrong to say that Starhub has challenges. Like SingTel and M1, the other two local Telcos, Starhub must deal with loss of revenue from the more and more popular use of apps such as Whatsapp (please pardon me if I did not get the name right as I don't use this) instead of voice calls and SMS.

Fortunately, Starhub has Cable TV but that business has not been growing much recently. Anecdotal evidence shows that more people are watching free online streaming content. I do that too on my iPad. Japanese anime, remember?

Of course, now, the new threat is the introduction of a fourth Telco in Singapore and this is probably "da bomb". How badly would Starhub's business be affected? I don't know. Would Starhub's ability to pay 20c in dividend per share (DPS) annually be affected? I don't know.

I do know that paying 20c per share annually in dividend means distributing almost all of its earnings to shareholders. So, if its business should suffer a decline in earnings per share (EPS) and this is a real possibility, we could see a reduction in DPS.

I could get a 5% dividend yield if I were to invest in SPH now. Of course, Starhub is not SPH. They are different animals but paying out almost all their earnings as dividends to shareholders make them similar in that respect. They could see earnings come under pressure for different reasons but that makes them similar too as the challenges are very real.

I would like to have some buffer in terms of dividend yield buying into SPH and Starhub because I am investing in them primarily for income and not growth. A more or less predictable 5% dividend yield might be attractive to me but to have a buffer means getting in with a higher yield which means a lower entry price.

Anyway, I decided to nibble at Starhub at $3.85 a share. That gives me a prospective dividend yield of 5.19% which provides a very thin cushion. This is really nothing to shout about and, definitely, I am not expecting to make a lot money with this entry price. From here on, I could, however, buy more if its stock should see more price weakness.

Related post:
How much to invest? Nibbles and gobbles.

AK denied Starhub extra income!

For 4 years, I enjoyed unlimited mobile broadband access at only $19.37 a month. Then, my most recent invoice from Starhub shows that I must pay $38.72 a month from now on. That stunned me. I looked at the invoice for a minute or, maybe, two before the fact sank in.

Oh, no. Doubled.

Although an extra $19.35 a month might not seem like a lot (well, that was what my mom said when I lamented about this to her), it is an extra $232.20 a year! That is more than what I give myself in pocket money a month!

I decided to take action and not being very savvy when it comes to IT stuff, I sought the opinions of my FB readers'. After many comments, Wilson (pero) told me "If 3g is enough for you, 7.2 mbps, it's 19 bucks." Yes! Under $20 a month!

So, I made a trip to a Starhub service centre and re-contracted.

Apparently, my old mobile broadband had a speed of only 2 mbps although the dataplan provided for unlimited usage. The service staff told me that under the new contract, the speed will be faster at 7.2 mbps but the dataplan is restricted to 6gb of usage per month.

Faster speed but restricted data usage. Sounds acceptable although I didn't have any problem with a speed of 2 mbps before. I guess being upgraded to a speed of 7.2 mbps is like upgrading from my Mazda 2 to a BMW Z4. Wah! Nice!

At a price of $19.90 a month, it is just 2.85% higher than what I have been paying in the last 4 years. Wah! This is also nice!

I just denied Starhub an extra income of $18.82 a month or $225.84 a year. Wah! This is very nice! 

Makes me happy.

Related post:
How I earned $9,216 with a mug?
(Could be "How I denied coffee shops extra income?")

Starhub, CapitaMalls Asia and CitySpring.

A reader asked me what's happening to Starhub and another one asked me what's happening to CapitaMalls Asia. The recent price weakness must be spooky for quite a few investors.

Starhub's uptrend is clearly broken. The support at 20dMA broke five sessions ago and closing at $2.63 today on high volume looks ominous as a long black candle was formed. $2.63 is where we find the rising 50dMA. Could we see price bouncing off the 50dMA? We could but there is no clear sign of a reversal. So, if price bounces off the 50dMA, it could be just that: a bounce.

The MFI has been forming lower highs and in a rebound, we could see it testing its downtrend resistance which approximates 50% which itself is a natural resistance.  If the MACD continues to descend towards zero, we could see it crossing into negative territory. We could see price testing the 100dMA as support then. Using Fibo lines as a guage, $2.51 is also where we find the 161.8% Fibo line. It would take a brave person to go long at this point in time. Immediate resistance at $2.72.

CapitaMalls Asia's share price closed below $2.00 once more. A long black candle was formed on high volume as price closed at $1.97. Will this counter test its low of $1.91 touched on 7 May 10? With all the momentum oscillators trending down, it could.

Time to go long? I don't think so. I would let the downtrend run its course and wait for clearer signs of a reversal. Watch out, in the meantime, for signs of stabilisation. See if the candlesticks start moving inwards away from the lower Bollinger.

I fully divested my investment in CitySpring, an investment which I have long regarded as a mistake, in early October. Kim Eng has downgraded the trust to a SELL now: Kim Eng Securities downgrades Cityspring Infrastructure Trust to Sell from Hold, cuts target price to $0.52 from $0.62 on prospect of lower distribution payouts, dilution risks.

Cityspring Infrastructure cut to Sell by Kim Eng
Tuesday, 30 November 2010

© 2010 - The Edge Singapore

Related post:
CapitaMalls Asia: Uptrend broken.
CitySpring Infrastructure Trust: Thoughts on divestment.

Starhub: Testing support.

Technically, this counter looks a bit weak. $2.38 has been established as a strong resistance while $2.30 is a many times tested support. Volume was rather high today as price started at $2.38 and travelled all the way down to test the support at $2.30 before closing just 1c higher at $2.31.  Could the rising 50d and 100d MAs lend support to $2.30 or would the support break?

The declining MFI suggests that demand has weakened while the declining MACD suggests that the shorter term MA is losing altitude.  All in, a rather ominous picture for the bulls. Support at $2.30 is critical. If this support level holds as momentum oscillators decline, that is a sign of strength. If it were to break, $2.22 would be the immediate downside target.

STI drops 0.3% to 3,014.77 at closing.

Hyflux (HYF SP), Singapore’s biggest water treatment services provider, increased 1.6% to $3.28. The company said it and Mitsui & Co. will start a venture to buy stakes in four water treatment plants in China and offer to take Hyflux Water Trust (HYFT SP) private. The trust surged 11% to 76 cents. The venture will offer to buy 205.5 million shares in Hyflux Water at 78 cents each.

Tuesday, 03 August 2010

© 2010 - The Edge Singapore

Charts in brief: 27 May 10 (Part 2).

Healthway Medical: The MACD is poised for a bullish crossover with the signal line in negative territory. MFI is just above the oversold region while OBV has been in gradual decline.  Technically, not very inspiring although the 14c support has been recaptured.  This is a long term support provided by the 200dMA which has flattened.

The shorter term downtrend is obvious with both the 20d and 50d MAs declining. Overcoming the 20dMA resistance would probably see 15.5c tested as a significant resistance level.  Another chance to sell at resistance? Perhaps. Good luck to all who are still vested.

LMIR: An impressive white candle day. MFI formed a higher low and is rising.  OBV is rising. MACD has turned up towards the signal line.Without higher volume on an up day, we have to remain somewhat sceptical of the upmove but an upday is always welcomed. I would now wait to see if the upward movement continues. I expect resistance to any continuing upward movement in price at 47c which was the support level which failed on 19 May. This was rather recent and is still fresh in the minds of market participants.
 

NOL: Buying momentum has been improving with the MFI rising.  OBV has been rising strongly too, suggesting accumulation is robust. A white engulfing candle formed today after a black spinning top yesterday. This confirmed the black spinning top as a reversal signal.  Expect further resistance at $1.94 and $1.99.

Saizen REIT: It is quite obvious that there is some weakness in the short term.  If the tension in the Korean peninsula should escalate, more nervous investors might sell their investments in Saizen REIT. This, unfortunately, is not something we could have anticipated or controlled.  Fundamentally, Saizen REIT is improving over time and its income stream is stable and secure. 15.5c remains a significant support.  The next significant support is at 14.5c.

SPH: Things are turning around, it seems.  A white candle day with MFI and OBV rising. MACD has gone flat which allows the distance with the signal line to lessen. Immediate support provided by the 200dMA at $3.70 while immediate resistance is at $3.78.  Overcoming $3.78 would find further resistance at $3.82 where the fast descending 20dMA seems poised to form a dead cross with the 100dMA in the coming sessions.

Starhub: Price has not been able to recapture the 200dMA support so far. $2.14 remains the immediate resistance. Although MFI has been rising, forming higher lows, OBV has not been as enthusiastic.  This suggests that we have positive buying momentum but accumulation is weak. MACD is still declining in negative territory and the downtrend is still very much intact.

A successful break above the 200dMA would find resistance at $2.19, the top of a base formation which lasted a few months.  Upside seems limited and going long at this point seems less likely to be rewarding. Any decline in price from here should see initial support at $2.06, the neckline of a reverse head and shoulders formation seen in November 09.

"We could have had an interim bottom of some kind - had an incredibly negative spate with really big volume on the downside," says Danielle Park, president of Venable Park Investment Council and author of Juggling Dynamite. "I think the themes we're concerned about today are like the volcanic cloud over Europe. It'll blow away for a little while and then it'll come back." 
Posted May 26, 2010 05:09pm EDT by Aaron Task



Related post:
Charts in brief: 26 May 2010.