CapitaMalls Asia: To buy on possible weakness.

There is a rather obvious negative divergence between price and the MACD. Higher price was achieved with a lower high on the MACD recently. So, we should not be surprised if the share price should decline in the near future as positive momentum in the short term weakens.

However, look at the OBV. There is no sign of smart money retreating as price rose. In fact, it is scaling higher. This suggests that smart money could use any price weakness as an opportunity to buy.

Indeed, if we look at the weekly chart, there is no sign of a negative divergence. The MACD is rising higher into positive territory. The longer term technicals definitely have a bullish bias.

However, with the share price nearing the declining 100w MA which is at $1.71 now, the near term weakness is not unreasonable. The 100w MA is expected to provide some strong resistance.

With the OBV rising, any pull back in price to supports is likely to be a buying opportunity. The pull back should be on the back of declining volume to make the case for buying more compelling.

Of course, the counter could decide to do a correction using time instead. That would be most annoying but that is Mr. Market.

Related post:
CapitaMalls Asia: Going XD on 23 April.

Affordability of housing in Singapore.

Hot on the heels of my last blog post on property prices in Singapore and whether more cooling measures are on the way, I came across an article in TODAY which reported that HDB slammed PropertyGuru for inaccurately reporting that it is more affordable to buy a private property than a resale HDB flat.

I am not really interested in their squabbles since it has no bearing on my life. 

However, I am interested in the last three paragraphs of the article, especially the last two which should put to rest any doubt about the government's intention of driving down the prices of residential property in Singapore.

"One cannot deny the fact that in the last five years, income has not increased at the same rate as property prices," he (PropNex Realty chief executive Mohamed Ismail) said. "However, all property prices are subject to cycles and a correction is likely when the affordability ratio widens."

The HDB felt the rise in HDB resale and private property prices in recent years "is not sustainable". 

"That is why the Government has been intervening with both supply and demand measures, in order to correct the imbalance," said the HDB. "The market has moderated considerably."

With all newly-wed first-timers "largely assured" of access to a new flat, the HDB said it would focus on helping second-timers this year. "As we assist second-timers in getting a new HDB flat, the impact will be felt in the HDB resale market," added the HDB. 

"Meanwhile, URA (Urban Redevelopment Authority) will continue to push out land supply for new private property development, to match the demand. The affordability of housing in Singapore should further improve in the months ahead."

Source: TODAY, 24 March 2012.
PropertyGuru report misleading: HDB.

Related post:
More cooling measures on the way?

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Weekend Comment Mar 23: Flight to REITs as volatility returns
Friday, 23 March 2012

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Singapore tightens rules for developers
Wednesday, 18 April 2012

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