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SPH is looking interesting as Mr. Market has become extremely pessimistic about it, it would seem. SPH's share price has been retracing to supports on lowering volume since 12 April 2013. This seems like a classic low volume pull back.
The MFI, a momentum oscillator which looks at both price and volume, has dipped further into oversold territory but this does not mean that share price will turn up from here immediately, of course. The CMF which measures money flow shows a possible higher low and this is what is interesting for me. Yup, a positive divergence, perhaps.
If my reading is correct, price might drift a bit lower with the 150% Fibo line at $3.99. It might also overshoot to the downside. Then, there could be a rebound and share price could go on to test channel resistance. $4.30, maybe?
OK, I know I shouldn't have done that. Done what? I just gazed into my crystal ball which is actually a bowling ball and tried to look into the future. Bad AK! Bad AK!
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| Clementi Mall |
Some people say that investing in SPH is still risky compared to putting money in a 10 year government bond. The SGS 10 year bond now yields some 2.43%. In 2012, the yield was 1.3%.
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| Source: MAS |
Imagine how bond holders were crushed recently but that is another topic.
Well, with gearing level at almost zero and a strong cash position, SPH is a relatively low risk investment for income now, I would argue. So, it is still a good investment for income especially if it is able to yield at least 6% per annum.
For traders who are thinking of doing some counter trend trading, there could be an opportunity here. For investors who are thinking of increasing their long positions for income, lower prices will make SPH even more attractive, of course.
Related posts:
1. Motivations and methods in investing.
2. SPH or SPH REIT?
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