K-REIT: Trading bands.

It seems that the worst is over for office rentals in Singapore. There is a general expectation that things have stabilised and we could even see some upside next year.  I have a small position in K-REIT in my frozen portfolio and this small investment is actually enjoying a paper gain now.  So, when would I sell my stake?

We could do a very simple TA for K-REIT even if I do not have access to today's data on ChartNexus. Price touched a high of $1.28 before closing at $1.26. It opened at $1.27 and touched a low of $1.25. So, picturing it mentally, it formed a black spinning top today. That it touched a high of $1.28 is significant as it confirms $1.28 as an important resistance level. Volume was only half of yesterday's which suggests a lack of conviction by sellers today even as price action formed a black candle.  So, the indecision suggested by the black spinning top does not have strong downside pressure, I feel.  In case of continuing downside, where do I see support?

Looking at the chart, it is quite obvious that $1.22 was a major resistance level and I expect this to provide immediate support in case of a move downwards. If this breaks, the next support is at $1.16.  Having said this, you could have noticed an interesting phenomenon. K-REIT seems to be trading in a 6c trading range recently: $1.16 to $1.22 and $1.22 to $1.28.  This is useful information for anyone who is interested in profiting from some range-bound trading.

In the event that $1.28 resistance is taken out, one could therefore expect $1.34 to be the next resistance level if this phenomenon continues to play out.

Singapore office plays better bet vs developers: Morgan Stanley
Tuesday, 14 September 2010

© 2010 - The Edge Singapore

Golden Agriculture: Trading Buy by OSK.

On 8 Sep 10, I mentioned that "I am vested in Golden Agriculture because I believe in its fundamentals." So, even if the technicals were somewhat directionless, I was willing to take the risk going long. Today, OSK upgraded Golden Agriculture's target price to 68c. Fundamentally, I think that is a fair price.  However, how does the technical picture look?

Today, its share price hit a high of 60.5c before closing at 59c, forming an inverted black hammer in the process. That this happened on much higher volume than the previous session is not promising.  On a brighter note, it does mean that price action broke out of the triangle suggested on 8 Sep 10 on the upside.  Could this be sustained?  I don't know about 68c but I spot a major resistance at 62c. This has been tested many times and price has closed above this level only once this year and that was on 11 Jan 10.  Many people who bought at 62c are probably waiting to break even at that price. Hence, the expected resistance.  So, if price does test 62c again, I would sell some.  In case of a further decline in price, I see immediate support at 58c.

I am not able to comment on the momentum oscillators or OBV this evening and I am afraid I do not have a chart to put up as, for some reason, my broker's version of ChartNexus has not been updated yet.

Golden Agri-Resources raised to Trading Buy by OSK. Expects "very strong" 3Q10 results after 2Q10 weakness due to dry weather, as production recovering.
Tuesday, 14 September 2010

© 2010 - The Edge Singapore

Related post:
Golden Agriculture: Triangle.