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.

Raffles Education: Resistance at 200dMA.

Raffles Education extended gains yesterday and closed at 30c, the resistance provided by the 200dMA. A wickless white candle was formed on the back of increased volume. OBV rose steeply, signalling accumulation. MACD rose into positive territory, signalling the return of positive momentum.

MFI and RSI rose higher, crossing into overbought territories. Although signalling heightened demand and positive buying momentum, the indices, being in overbought regions, suggested that further gains could be limited. This panned out today.

A doji was formed today, suggesting indecision. Although the momentum oscillators continue to rise, the OBV has flattened, signalling a stop to accumulation. The explosive rise in price could be at an end. Pull back could find support at 27.5c and 26.5c, as provided by the 100d and 50d MAs, respectively.

Related post:
Raffles Education: Sold at 27.5c resistance.

Raffles Education +5.5%; buybacks give confidence - Kim Eng
Thursday, 06 January 2011

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