Charts in brief: 19 April 10.

Most of my portfolio hardly budged as the STI retreated 1.5% today.  The exceptions are the likes of CapitaMalls Asia and SPH.  AIMS AMP Capital Industrial REIT, LMIR, First REIT and Saizen REIT are holding steady.  I believe that any further weakness would bring out the buyers as the problem in the USA with Goldman Sachs should not have any material impact here in Asia.  It is not a financial meltdown or anything like it.  It is a legal matter and the proceedings are domestic in nature.

STI drops 1.5% to 2,960.93 at closing
Monday, 19 April 2010

© 2010 - The Edge Singapore

CapitalMalls Asia: Closed at $2.21.  I have put in my buy queue for tomorrow at $2.20.  In the last three sessions (today inclusive), the volume has been reducing as price retreated.  Stochastics has dipped into oversold territory.  MFI is declining fast and OBV shows some distribution.  Overall, not a pretty picture.  Any purchase of shares in this company is now based on fundamentals, not technicals as expectations of a feisty reversal is out the window for now.

Golden Agriculture: Price closed at 59c, supported by the rising 20dMA.  A doji is formed.  This is, of course, a possible reversal signal.  The MACD has just completed a bearish crossover.  Further weakness will see support at 56.5c, provided by the rising 50dMA.  I might reload then.

Healthway Medical: >2.6m shares sold down at 16c at 5.05pm, creating a gravestone doji in the process.  This is the first time the counter has closed at 16c since 3 March 2010.  The MACD has gone under zero, suggesting an end of positive momentum.  16c remains a critical support.  If this goes, the next support is at 15c.  That would be a nice price to accumulate some.

Saizen REIT: Some profit taking continues. MFI has formed a lower high but the OBV is flat, suggesting that although the buying momentum has stalled, there is no heavy selling down going on. The rising 50dMA is at 16.5c which coincides with my believe that 16.5c is the new floor for the counter and should be a strong support.  Uptrend is intact.

SPH: A big black candle day as price managed to close just 1c above $4.00.  Any further weakness will see support at $3.89 where we find the rising 20dMA.  The rising 50dMA is at $3.82.  I would accumulate on weakness.  Uptrend is intact.

Courage Marine: Down 1c, MFI is dipping out of overbought territory.  Any weakness should find support at 21.5c.  The flat 200dMA should provide support at 20c in case of further weakness.  I would accumulate on weakness as I like the fundamentals over the next few months at least.  Uptrend is intact.

China Hongxing: Closed 0.5c lower on lower volume. Signs are still good that this counter is probably prime for a breakout. Price action is now trapped between the 50dMA (15.5c) and the 20dMA (15c) in a crab-like pincer.  Going by the rising MFI and OBV since 30 March, the chances are good that price is likely to move higher.

Related post:
Charts in brief: 16 Apr 10.

Avoiding the memory effect.

Human beings remember well things which are particularly unpleasant or particularly pleasant.  In short, human beings remember extremes very well.  However, as investors, we really have to stay level headed and be in tune with the present, the current reality, and not let the past shackle us.

For example, I have a friend who bought a few hundred lots of Healthway Medical's shares when it was 12.5c, if I remember correctly, last year and sold most of them at 13c or so just before the price ran up.  The investment in Healthway Medical was one premised on its relatively strong fundamentals and inexpensive valuation.  However, any shareholder of the company at the time would remember the months of malaise in its price action last year and my friend divested most of his shares.  With only 100 lots left, he became reluctant to sell even as the price rose to hit the eventual technical target I identified at 19.5c shortly after.

When we spoke, he told me, "but I only have 100 lots left". I told him that he must not base his decision on the larger position he once had.  He had to make his decision on what he had then which was 100 lots.  So, the question to ask was: "if he did not have those hundreds of lots which he sold off cheap (on hindsight) and 100 lots were all he had to begin with, would he sell some, if not all, to realise some gains?"  Freed from memories of the past, the answer was a loud and clear "yes".  Never be chained down by what could have been.  Focus on the present and what is.

Similarly, I have friends who told me that they should have bought Healthway Medical shares at 10c when I first started accumulating in mid 2009.  That's the beauty of hindsight, isn't it?  These same friends also said that they should have started accumulating Saizen REIT at 10c.  The memories of the past chained them down and they could not act in the present.

I would tell anyone that I only started accumulating Saizen REIT at 13c, not 10c, and I kept on buying as its price rose. I bought more at 16.5c too.  Why?  The uptrend is intact and this has not changed.  The fundamentals are still compelling.  There is no reason for me to sell if the very reasons which compelled me to buy have not changed and are still valid.  Mind you, these reasons could be fundamental, technical or both.  I am not a purist.  I am a pragmatist.

I might have shared some of these thoughts before in some other posts.  I cannot remember but if I am repeating myself, I beg your pardon.  Please humour me.  Have a great Sunday!

Tea with AK71: Top 5 posts.

I visited Google Analytics just now to see how my blog is doing.  I was surprised when I found that the most viewed post is actually something I wrote in December last year when I first started this blog.  I guess I am not the only one who is interested in building a high yield portfolio.  Sweet!  Or do you prefer teh-o kosong?

Here are the top 5 posts of my blog based on the number of pageviews for the period under review (March 17 to April 16, 2010):

No. 1: High yield portfolio. 
Dated: 24 Dec 2009.

No. 2: Courage Marine: Riding the waves of recovery.
Dated: 3 Apr 2010.

No. 3: Portfolio strategy: Undervalued high yield counters.
Dated: 22 Feb 2010.

No. 4: LMIR: More units at 10% yield.
Dated: 17 Mar 2010.

No. 5: Healthway Medical: An updated valuation.
Dated: 24 Feb 2010.

Given the relative "youth" of the post in second place, I guess the interest in Courage Marine must be quite strong.  Good luck to all fellow shareholders. :)

Charts in brief: 16 Apr 10.

STI retreated today on lower volume to close at 3,007.19.  The market is digesting its gains and this is not something I would worry about for now.

STI down 0.5%, struggling to hold above 3,000
Friday, 16 April 2010

© 2010 - The Edge Singapore

China Hongxing: Coincidentally, DMG & Partners issued a buy call at 2.50pm, approximately an hour after my post about how the counter might present a trading opportunity this afternoon.  Their target price is 22c.  Just like their target price of 30c for Healthway Medical, it is a 12 months target.  So, I would stick to my earlier chart reading, recognising that if 15.5c is cleared, the next resistance levels are at 17.5c and 18.5c.  For the report by DMG & Partners, please see: 16 Apr 10 China Hongxing: Buy.

 

Healthway Medical: Technically, the weakness is obvious as the support at 16c has been tested four out of five sessions this week.  This support is provided by the flat 50dMA.  If 16c goes, the rising 100dMA should provide the next level of support at 15c.  OBV is flat and this should be viewed positively as it suggests that there is no heavy selling down of the stock.  So, downward pressure is somewhat limited.

Golden Agriculture: Closed down 1c at 59.5c on heavier volume. MACD has made contact with the signal line and is poised for a bearish crossover.  Things are looking somewhat bleak but let's see if the rising 20dMA will be able to push up the price next week.  The higher high on the MFI does suggest a return of positive buying momentum. This would confirm that the counter is doing a correction using time.  If the 20dMA fails to hold up as the support next week, the rising 50dMA is at 56.5c and the rising 100dMA is at 54.5c.  These two longer term MAs would provide stronger supports then.

CapitaMalls Asia: Price has broken down from the sideways movement. I see strong support at $2.20 and that's where I would buy more. Upside eventual target remains at $2.55.

Courage Marine: Demolished the gap resistance at 23.5c in early morning trading to touch a high of 24c.  The gap resistance soon reasserted itself and the counter ended the session at 23.5c.  The white candle day took place on the back of much increased volume.  OBV turned up sharply, suggesting heavy accumulation. MFI continues pushing higher into overbought territory but if the bullishness continues, the index could stay overbought for much longer.

SPH: Price pushed higher to close at $4.07 but volume has reduced significantly. MFI has pushed higher into overbought territory. OBV continues its upward trajectory, suggesting continuing accumulation. Upside target is still $4.20 but it remains to be seen if this could be achieved.  Volume should expand as price pushes higher for the upmove to be sustainable.

Saizen REIT:  Extreme low volume day.  Volume has not been so low in more than two weeks.  There has been some profit taking going on but price has stayed firmly above the 20dMA.  MFI shows a decline in buying momentum and OBV shows that some distribution has been taking place.   Despite all this, price has stayed at 17c and this shows strong support.  If 17c gives way, we should find a stronger support at 16.5c, provided by the rising 50dMA.  It is my personal believe that 16.5c is the new floor for Saizen REIT if it is ever tested.
Please see: Saizen REIT: A symmetrical triangle?

Related post:
Charts in brief: 15 April 10.
China Hongxing: Prime for a breakout?