LMIR's unit price has been slowly and steadily climbing higher and this is netting me some handsome capital gains on the rights units from nil paid rights purchased not too long ago.
Remember I mentioned that LMIR was too cheap to sell? I still think it is too cheap to sell but it is approaching the fair value of 41c which I ascribed it back then. Technically, it is now also closing in on the next resistance level at 39.5c.
If it should break 39.5c convincingly, we could see resistance provided by the declining 20wMA at 41c tested next. 41c coincides with the fair value I have ascribed to the REIT's unit price and I expect strong selling pressure if it should be tested.
I have done another partial divestment today at 39c, one bid away from the immediate resistance of 39.5c, taking some gains off the table. With this partial divestment, I now retain only a fifth of all the rights units from nil paid rights I purchased in its rights issue.
Why not wait for 41c? There is no way we can be sure that 41c will be tested and I am beginning to see some signs of possible weakness in the form of lower highs on the MFI and Stochastics with unit price pushing higher. The lower high on the MFI suggests weaker demand with price going higher.
On the weekly chart, the MACD has completed a positive crossover with the signal line but it is still in negative territory. Although MFI and Stochastics' gradual rise from their oversold territories suggest that there is some support for the REIT's unit price, we could see some price weakness in the coming weeks.
Accumulating when longer term supports are tested would be a good strategy. On the weekly chart, I see 36c as a technically attractive price to add to long positions.
Related posts:
LMIR: Partial divestment at 38c.
LMIR: Too cheap to sell.
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