China Hongxing: Eyeing 20c.

One blog post for the road. :)

I have not had much luck with China Hongxing, having lost some money trading this counter twice in the last few months. I am no longer vested and it seems that things are looking up for this counter. In the last session, China Hongxing broke resistance at 17.5c. This was after closing above the 17c neckline of what is now clearly a double bottom formation on 4 January.

The OBV shows gradual accumulation while the momentum oscillators are all rising. The MACD is rising in positive territory, indicating the return of positive momentum. A higher low on the MFI as it continues to rise suggests firm demand although the RSI has risen into overbought territory. Continuing upmove in price with higher volume could see it test resistance at 20c eventually while 17.5 is immediate support in case of a pull back. Good luck to all who are vested.

First REIT: Retesting high at 75c.

Today, First REIT hit a high of 75.5c before retreating to 75c, the high achieved on 2 and 3 Dec 10, adjusted for the recent rights issue. OBV shows ongoing accumulation while the MFI shows firm demand. The RSI has entered overbought territory but in very sanguine circumstances, it could stay overbought for a while more.

71c was a many times tested resistance which should turn strong support. It is also where we find the 50d and 20d MAs approximating. The 20dMA is also poised to form a golden cross with the 50dMA at this price level. Anyone who bought more units of First REIT, confident of its sound fundamentals during its recent troubled rights issue is now amply rewarded.

Could this REIT's unit price go higher? Your guess is as good as mine but you might remember that I have a fair value estimate of 80c per unit for this REIT. Apparently, OCBC Research thinks it is worth much more with a fair value of 84c per unit. The listed positives are:

1. Good quality assets.

2. Strong and committed sponsor.

3. Steady and sustainable income.

4. Potential upside.

Read the report at http://www.remisiers.org/cms_images/First_REIT-110107-OIR.pdf

Related post:
First REIT: Excess rights not enough.