FSL Trust: Above the 20dMA.

FSL Trust, for the first time since 23 April, closed above the 20dMA which is currently at 38.5c. Bollinger bands are squeezing which indicates the possibility of a big move in either direction.  In this case, chances are the move would be positive.

Momentum oscillators continue to rise.  The MFI has formed another higher low as it rises above 50%.  Demand is back. RSI too formed a higher low which suggests that price is rising at a good pace. OBV is flattish which suggests a lack of heavy distribution.  Perhaps, the sellers are done selling.  MACD continues to rise above the signal line but is still in negative territory.  This could just be a rebound.  Although volume increased today, it is rather modest compared to the volumes on the black candle days which sent the price down to where it is today. Volume will have to expand more meaningfully in future sessions to try and push the price higher.

The low of 11 Jun at 36c could indeed have been the bottom.  However, we need confirmation in the next session that the 20dMA at 38.5c is indeed resistance turned support. Once confirmed, price could possibly rise to close the gap at 43.5c which approximates the declining 50dMA if momentum remains positive.

Related post:
FSL Trust: Land ahoy?

Golden Agriculture: Rebounding.

Golden Agriculture dipped briefly below the 200dMA before moving higher to close at resistance provided by the 50dMA at 53.5c.  This coincides with the trendline resistance which connects the high of 26 April at 62c and the lower high of 21 Jun at 55.5c.  This is the second downtrend. The first one connects the high of 26 April and the lower high of 13 May at 56.5c.  The second downtrend is gentler than the first and less dramatic.

Although trading volume increased today, it is not very heavy.  This might just be a rebound but if we believe in fan lines, price could move higher to break the trendline resistance to retest 55c as resistance.  This resistance level is quite obvious from past candlesticks and it is also where we find the flattish 100dMA. If the rebound is strong, price could even go up to 56c to retest resistance established earlier in May when the lower high of 56.5c was formed.  That, I believe, might be the extent of the current upmove.

MFI, a momentum oscillator which accounts for both price and volume has been in decline and this suggests a weakening demand. Price is probably moving up due to a lack of sellers and not because of an abundance of buyers. OBV is up which suggests that some accumulation is happening and there is some support. Downside could thus be limited.

Price of CPO is still entrenched in a downtrend and it does not look like the situation would be improving anytime soon.  The fundamentals are not strong but the share price is enjoying a bounce.  Immediate support at 52c and immediate resistance is at 53.5c.  If resistance is taken out, next resistance is a band from 55c to 56c.

Charts in brief: 5 Jul 10.

NOL: MFI did not manage to recapture 50% as support and its continuing decline suggests a lack of demand.  RSI similarly did not manage to recapture 50% as support and this suggests the speed of decline in price is relentless. Downtrend in price is intact. Since forming an inverted hammer on 21 Jun, volume has increased as price declined.  In the last two sessions, trading volume has fallen somewhat. This might or might not be a temporary respite.  I see support at the flat 200dMA, $1.83, and resistance at a confluence of MAs, $1.98.

SPH: Price touched a high of $3.88 again. MFI is rising sharply.  Demand is strong.  OBV is rising.  Accumulation is ongoing. Volume is, however, a tad lower today.  Breaking $3.88 could possibly see a target at $4.08 reached. Resistance at $3.95, the lower high formed on 10 May, would have to be taken out first, in such a case.

Metro: This counter has been in a downtrend since it peaked on 7 Jan, touching a high of 90.5c. Since May, indicators are showing some strength returning.  MFI has been climbing since late May.  OBV has been rising since late May.  RSI has been rising since early May.  The peak in distribution happened on 25 May as an ugly black candle was accompanied by a huge spike in trading volume.  A low of 73.5c was touched in two separate sessions on 21 May and 7 Jun.  That likely is the immediate support for now.  With momentum oscillators bouyant, it is unlikely that 73.5c would be taken out anytime soon.  In fact, the 20dMA has been rising gently since middle of June. The trend is still down but the worst might just be over, for now.

Related posts:
NOL: Downtrend.
Charts in brief: 2 Jul 10.

K-Green Trust: A stable source of passive income.

I spent some time recently looking into the latest trust to list in the stock market here: K-Green Trust (KGT). This is an infrastructure business trust listed by Keppel Corporation recently. Initially, it only has three assets:

1. Senoko Waste-to-Energy Plant

(Concession period: 15 years from 1 Sep 09)

2. Keppel Seghers Tuas Waste-to-Energy Plant

(Concession period: 25 years from 30 Oct 09)

3. Keppel Seghers Ulu Pandan NEWater Plant

(Concession period: 20 years from 28 March 07)

The Waste-to-Energy plants treat close to half of Singapore's incinerable waste while the NEWater plant is one of Singapore's largest.

The main attraction of this trust is the stability of its non-cyclical cash flows and a lack of counter-party risks as its customers are NEA and PUB.

Using the usual metrics for analysing trusts, we find that KGT has zero gearing, has an estimated dpu of 7.82c (which translates into a yield of 7.38% based on the last traded price of $1.06) and is currently trading at a 5.5% discount to its NAV of $1.12. Although the small discount to NAV is unattractive, the zero gearing is.  There is room for KGT to gear up to, say, 40% and improve its dpu in time.

Stable cash flow, low risk and room to grow.  This sounds like a good addition to my passive income portfolio. It diversifies my income stream and injects a higher level of stability at the same time. The lower yield is acceptable because of its debt free balance sheet.  When a balance sheet is heavy in debt, the risk is higher and, consequently, I would demand a higher yield.

I would like to buy some units of KGT but how much would I pay? On its first day of trading, KGT started off at $1.17 and hit a high of $1.33 and closed at $1.11. Usually, I would depend on TA here but being so new in its listing, four days old, to be exact, TA is impossible. However, we can see that it reached a low of $1.00 on 1 Jul and formed a white candle with a long upper wick on 2 Jul as it closed at $1.06.  This suggests some selling pressure.

Why the selling pressure? If we remember that KGT units were actually given to existing shareholders of Keppel Corporation as a special dividend, the reason becomes apparent. Some shareholders are monetising their "dividends".  If this continues to play out and if the buying interest does not strengthen to counter balance the selling pressure, KGT unit price could go lower.

I would be quite happy to collect some units at $1.00 which would give a yield of 7.82% to begin with.

K-Green Trust rated hold
Monday, 28 June 2010

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