Marco Polo Marine: The longer term picture.

I have blogged about how the daily chart of Marco Polo Marine spots many negative divergences and how anyone who should go long at present would have to do so in a measured manner. This means not throwing in everything including the kitchen sink.

How big could a correction be if it should happen? Looking at the weekly chart, we see that share price could pull back to support at 36.5c which is where a golden cross has just formed as the 20wMA made a bullish crossover with the 100wMA.

42c to 36.5c? Wah! That is a 5.5c decline or a 13% fall. If that scares us, we should stay away. After all, it could happen. Look at the volume on the weekly chart and we will see how it has been declining as share price tried to push higher.

Then, why am I not selling?

I like to marry FA and TA. In an ideal situation for me, FA tells me if a stock is undervalued and TA tells me when to buy. It is also true that FA tells me if a stock is overvalued and TA tells me when to sell. Remember, these are ideals.

Technically, I observed how trading volumes in the two black candle weeks are much lower. They are much lower than volumes in the white candle weeks. This suggests to me that sellers lack conviction.

The MACD on the weekly chart is still rising. There is no let up in the positive momentum. OBV has been rising over the longer term which suggests that there is more accumulation than distribution going on.

Add the fact that the stock is still undervalued given Marco Polo Marine's numbers and prospects as well as comparison to peers, there isn't a strong case for me to sell. In fact, the case to continue accumulating on weakness is much stronger.

Related post:
Marco Polo Marine: Taking reference from trendlines.

Beware of Chinese New Year goodies!

OMG!



A timely reminder for some, perhaps.

Confession: I have been eating bak kwa and pineapple tarts liberally the entire week! No wonder my pants feel somewhat tighter. Oh dear.

CapitaMalls Asia: Reduced exposure.

Although analysts from Citibank, OCBC and more have given CapitaMalls Asia glowing reports, the long black candle which was formed yesterday on the back of very high volume was ominous.

Breaking immediate support provided by the 20d MA earlier in the week, the bearishness was confirmed as trading started under the 20d MA. It then went on to hit the 50d MA at $2.06 before recovering a bit to close at $2.08.

The question to ask now is whether the 50d MA, the new immediate support, would hold. The MFI has formed a lower high. The MACD has formed a lower high. Negative divergences aplenty and bearing in mind that prices go down a river of hope, I put in an overnight sell order at $2.12 to reduce exposure.

If we look at the weekly chart which provides a longer term picture, the 20w MA is still under $2.00. Currently, it is at $1.93. So, in the event of further high volume selling, we could well see the share price going lower to this longer term support.

The longer term uptrend is still intact but we cannot discount the possibility of a stronger correction in the shorter term. So, as I try to be pragmatic instead of being overly bullish or bearish, I have reduced exposure at what I think is the support turned resistance at $2.12.

LMIR: An unimpressive 4Q 2012.

I don't have much to say other than how unimpressed I am with the results.

DPU: 0.74c (payable on 5 March)

Gearing: 24.5%

NAV/unit: 56c

Occupancy: 93.5%

The management could possibly work on positive rental reversions for leases expiring this year. They could also try to push occupancy closer to 100%. All these would contribute to a higher DPU.

Please, no more acquisitions at least in 2013. For now, efforts should be on improving the performance of the recently acquired malls.

If there should be any acquisitions and it could happen since gearing is at only 24.5%, I hope that the management will be more careful in their efforts.

Careful? Yes, to ensure that DPU does not get watered down again. This was something I talked about in past blog posts.

LMIR really tests one's patience and the management's record leaves much to be desired.

Related post:
LMIR: 3Q 2012.

See slides: here.

Saizen REIT: DPU 0.66c.

With the JPY having declined almost 20% against the S$, I was expecting a reduction in DPU, everything else remaining equal.

However, all else did not remain equal and instead of a reduction in DPU, an increase to 0.66c is what we have.

What did the management do to improve the DPU?

1. Aggressive buying back of units from the open market.

2. Continual buying of new properties in Japan.

3. Lowering finance cost through loan principal repayments.

4. Improved occupancy from 91.0% to 91.7%.

To be fair, the REIT actually deployed its cash reserves with regards to point 3. Whether it is able to continue doing this depends on their level of cash reserves in future.

So, there is still a possibility that we could see future DPU reducing not just because of a weaker JPY but also because future loan principal repayments could be made from the REIT's income.

However, if it should happen, I believe it to be just short term pain as future DPU could be then enhanced when finance cost becomes reduced further, everything else remaining constant.

I am happy with the numbers reported and will be even happier when income distribution takes place on 22 March 2013.

See announcement: here.

Related post:
Saizen REIT: Still a buy?

Lucky 4D for Chinese New Year 2013.

I always say that luck is an important part of anything we do in life. We might do everything right but if luck is not with us, it is just too bad, isn't it?

Well, with the Year of the Snake just round the corner, let us look forward and embrace all the good fortune that will come our way!

ASSI has churned out 4 numbers: 8709

What to do with these 4 numbers? I don't know. What do you think?

Here is wishing all Chinese readers

a very happy and prosperous Chinese New Year!

Sell when it is HOT!

I was on the phone with a friend whom I have not seen in many years. He was wondering if he could visit me during the Chinese New Year holidays, remembering belatedly that I moved out to stay on my own a few years ago.

When I told him that I sold my place more than a year ago and moved back to stay with my parents, he was incredulous.

"Why did you sell? Real estate in that area is really HOT now!"

His statement reminded me of what a bank officer asked me many years ago when I was at the bank to sell my unit trusts which went up 40% in value. Lucky me.

"Why are you selling now? The Chinese stock market is doing so well now and you are making money!"

To me, it is quite simple. Shouldn't I sell when it is hot and when I am making money? Is it better to sell when it turns cold and when I cannot make any money?

Related post:
More cooling measures on the way?

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Consumers in Singapore to spend less in 2013.

I keep hearing how most businesses found 2012 more difficult compared to 2011. I am in agreement. Now, to dampen spirits further, if a report by Nielsen's is correct, 2013 could be even tougher.

In a survey carried out, it seems that consumers in Singapore are cutting back on discretionary spending in 2013. The top 3 areas of cut backs:

1. New clothes (55%)
2. More expensive grocery (47%)
3. Utilities (47%)

If we think that it is probably due to a lack of job security or the rising cost of living in Singapore that is causing consumers here to cut back, we are not wrong.

However, it was also found that consumers will remain cautious in their household expenses even if there should be an improvement in the economy. I believe that this hints at a general feeling of pessimism and a distrust of the economy that runs deeper than what we might believe to be the case.

To cut back on consumption is an important step in individual wealth building efforts for ordinary people but I do not think that wealth building was on the minds of most of the respondents in the survey. Why? In the same survey, the respondents also revealed that they would be cutting back on investments too.

The business of naming.

From time to time, I see very unfortunate choices in names whether for people or things.

"Hi Fish, I'm Noodle. Would you like to go out on a date. I know this place that sells very good Yu Pian Mi Fen (Sliced fish noodle)."

The Yu Pian Mi Fen did its magic. Fish and Noodle got married and had four children too (much to the government's delight).

"These are our handsome boys, Barracuda and Sturgeon. These are our beautiful girls, Fettucini and Ravioli..."

Choice of brand names, especially, could make or break a business.

"Cremate? Aiyoh! Choy!!!! So inauspicious!"

"Oh, it's Caremate...."

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Related post:
Save money with low prices and free shipping globally.

Marco Polo Marine: Taking reference from trendlines.

I read somewhere before that a trader in the USA made a lot of money over the years using only trendlines in his technical analysis. Yes, only trendlines. Nothing else.

This hints at the importance of trendlines and how they have an indispensable role in anyone's charting efforts. After all, don't we hear people saying stuff like "the trend is our friend" and "don't go against the trend"? The word "trend" keeps popping up in technical analysis.

So, we must know how to recognise trends if we want to improve our chances of success trading in the stock market.

If we look at Marco Polo Marine, it is obvious that the downtrend was broken towards the end of 2012  and it is now on an uptrend.

Drawing trendlines, we would see that its current uptrend is in two parts: an earlier trendline with a gentler gradient which I have labelled "T2" and a later trendline with a steeper gradient which I have labelled "T1".

Drawing these trendlines, we know where are the price supports which must hold for the uptrend to remain intact. Breaking these supports would possibly be a sell signal for some. Short sellers could also come in to push the share price down further.

For others, it would represent opportunities to load up at cheaper valuations but we want to load up closer to supports. Well, at least for me, I think that buying at supports in an uptrend is the way to go.

Today, my overnight buy order at 41c was filled.

Related posts:
1. Marco Polo Marine: Negative divergences.
2. Recommended books for TA.

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