CapitaMalls Asia: At support.

CapitaMalls Asia retreated 5c or 2.7% today, closing at $1.79 after touching a low of $1.78. Question on the minds of many people would be whether it would go lower? Who knows for sure? Looking at the daily chart, it is clear that $1.78 is an important support defined by the 50dMA as well as the 61.8% Fibo fan line.

Looking at the ADX, the suggestion is that there is no trend per se. In such a situation, look to the Stochastics and we see that it is gently declining but it is not oversold. Look then to the OBV and it does not show any distribution. In fact, since 15 March, the picture is more of accumulation than distribution. The volume today was not very heavy although a black candle was formed. 

If we believe that CapitaMalls Asia has gone into a range as suggested by the horizontal orientation of the Bollinger bands, then, buying at the lower end of the range would make sense if it should happen at all. That is at $1.72. Keep an eye on $1.78. If it does not break, we could see price going higher and breaking the longer term trendline resistance eventually.

Why am I sanguine about the situation? If we look at the weekly chart, since the week of 14 March, in weeks when white candles were formed, trading volume was higher than in weeks when black candles or dojis were formed. This is encouraging for the bulls. The pull back is possibly a chance for accumulation.

First REIT: Breaking resistance.

To any chartist, it is clear that First REIT broke an important resistance at 74.5c in the last session. Volume expanded significantly on a day when a wickless white candle was formed.

With the MACD rising into positive territory and with the RSI rising from the borders of its oversold territory, we could be seeing the beginnings of an earnest attempt to move higher in price. We could see stronger resistance starting from 76c with 77c being a significant many times tested resistance which also approximates the 150% and 161.8% Fibo lines at 76.8c and 77.2c respectively.

Looking at the weekly chart, we see the rising 100wMA approximating the upper Bollinger band at 78c. Possible target? Why not? Declining 50wMA is at 82c. Possible target? Again, why not? However, this is the weekly chart. So, it gives us insights into the longer term picture. If price were to climb higher, it is going to do so on a wall of worries.

Related post:
First REIT: 1Q 2011 results.