CapitaMalls Asia: Weakening technicals.

CapitaMalls Asia broke out of its symmetrical triangle on 16 Jun on higher volume. It then went on to break resistance provided by the declining 100dMA which coincided with the trendline resistrance on 21 Jun. It was not able to advance much further and I suggested looking at the 100dEMA which made it clear why it was so.

In the last session, support was provided by the rising 20dMA and a short white candle was formed. The 20dMA in recent sessions has merged with the trendline support and, theoretically, should be a strong support.  This is the third time this trendline support has been tested.  If a trader had bought some shares of CapitaMalls Asia each time its price tested this trendline support, he would have made some nice gains.  So, is it time to buy again?

If we look at the RSI, the uptrend is intact, which suggests that price is rising at a sustainable pace. However, a lower high was formed recently. So, a loss of momentum is being registered.

In recent sessions, volume rose as price retreated. So, let us look at the MFI which accounts for both price and volume. Here, we have a less optimistic picture as the MFI has clearly broken its uptrend. This suggests that demand has dropped and that more selling is underway.  This is a major difference from when the trendline support in question was tested twice before. In those earlier tests, the MFI was still uptrending strongly. Technically, the picture is weaker now.

Resistance has been established at $2.22 and immediate support is at $2.14.

Golden Agriculture: Inverted black hammer.

CPO price has been in a downtrend since forming a double top in March this year. Following this, Golden Agriculture's downtrend started in early April. We have to remember that this company remains most dependent on CPO's price as it derives most of its profits from upstream activities. So, weakening CPO price is a big negative for it.

Resistance provided by the 100dMA proved too strong to be taken out and price formed a lower high at 55.5c on 21 Jun. In the last session, volume expanded as an inverted black hammer was formed, closing at the 52c support provided by the 20dMA.

MFI has formed a lower low, suggesting a lack of demand for the stock in the immediate term.  OBV has turned down. Clearly, distribution is taking place.

If the 20dMA support fails, using Fibo lines and drawing a trendline support from the low of 25 May, we derive an immediate downside target of 50c which happens to be a round number too.

The fundamentals are not supportive and the technicals are not strong. Cautious market participants who have resisted the temptation to buy in recently on a possible breakout at 55c should be breathing a sigh of relieve.


Related post:
Golden Agriculture: Resistance remains at 55c.

FSL Trust: Land ahoy?

On 18 June, news of the release of Verona I was greeted with some relieve.  However, price has closed unchanged at 38c since. I expect Nika I to be eventually released as well but would this be enough to reverse the fortunes of FSL Trust's unit price?

Obviously, FSL Trust is still in a downtrend.  Is the current phase forming a floor or a base? Would the declining 20dMA push the price down further? These questions are hard to answer definitely.  However, TA can provide some clues as to the psychology of market participants.  Let's see.

The MFI has been rising since 7 May.  This happened as the price continued its decline. MFI is derived from the combination of price and volume. A rising MFI is a sign of demand as money flows into a stock. Looking back, the MFI was declining from March to April this year while the unit price of FSL Trust was rising.  That negative divergence was a warning sign as smart money was flowing out of the stock. Another reason why I was warning people to stay away from FSL Trust back then. The opposite is happening now with MFI rising, money is flowing back into the stock as price declined.

OBV has been rising since 11 June and this suggests that accumulation is back. All this while, the RSI has been more or less flat and hugging 30%, no longer oversold.  This suggests that the speed at which the stock is being sold down is very much slower or, indeed, has stalled.

Immediate support is a band between 37.5c to 38c.  Immediate resistance is at 40.5c.  If price retests the recent low of 36c, I would pay attention to the volume.  If it is much lower than what was achieved on 11 Jun (5.64m units), we could have the first hint of a bottom.

Related post:
FSL Trust: Verona I.

SPH: Reading the lines.

It is quite obvious that the Bollinger bands started expanding on 17 Jun and price rose above the upper band for the next two sessions. However, resisted by the 50dMA, price has declined and went on to test the 20dMA as support in the last session. So, for next week, the important MAs to pay attention to would be the 50dMA as resistance and the 20dMA as support.  These would be at $3.86 and $3.77 respectively.  So, I would not renew my buy queue at $3.74.  I would instead wait to see how things turn out.

MFI and RSI are both rising and this tells us that momentum is positive. However, price itself has been choppy with interchanging black and white candlesticks in recent sessions. The MACD, although above zero, looks somewhat tired and we have had three red histograms in the last five sessions.  OBV is flattish. Technically, we could also make a case that price rose on rather low volume in the last session.

If the 20dMA fails as support, the next supports are at $3.72 and $3.68.  I expect $3.68 to be a stronger support as it was a many times tested support in the recent basing process.

Now, many have been talking about the possibility of the STI going down to 2,400 points.  Personally, I blogged about it as well earlier on in mid May.  You might want to read it here: STI at 2425 points?  If this happens, what would happen to the price of SPH's shares? Would it be spared? I think not.  Then, how low would it sink to? For a clue, let's look at the weekly chart.

I would draw your attention to the declining MACD.  This has been the case since late October 09. In the same period, price has risen somewhat.  This is theoretically unsustainable. In recent weeks, as price recovered somewhat, there is no corresponding rise in the OBV which suggests that price has risen due to a lack of sellers and not because of an abundance of buyers. Volume has been similarly lacklustre.

If we believe in fan lines where traders who missed the first uptrend gets a second and a third opportunity to buy in, it is quite easy to see that the stock is now on the third line.  The initial steeper trend has been flattening into one that is more sustainable.  However, if this third line, which happens to coincide with the rising 50wMA, should break, we could see price correct to the flattening 100wMA at $3.35. Yes, why not?

I have divested quite a fair bit of my shares in SPH. Let's see if I get to buy some again at much lower prices.

Related post:
SPH: Another pleasant surprise.