Golden Agriculture: Sell down,

In my post on Golden Agriculture yesterday, I said that "Although volume expanded today, a case could be made that we are seeing a negative divergence with price.  Just keep this thought handy."

Golden Agriculture started the day at 60c to hit a high of 62c before retreating to close at 58.5c on high volume.  This is where we find the downtrend resistance which was overcome yesterday.

OBV has turned down which confirms that distribution is taking place.  However, the MFI is now higher than the previous high.  This hints that demand continues to be strong and there are buyers waiting to collect at lower prices.

Could 58.5c now serve as support?  It could but we need confirmation.  A stronger support is at 55.5c, as provided by the 100dMA.

Related post:
Golden Agriculture: Downtrend broken.

China Hongxing: Resistance broken.

Against the odds, China Hongxing broke the resistance provided by the 200dMA at 16c.  It touched a high of 17c before closing at 16.5c.

The sell signal on the MACD spotted in the last session is now negated as volume expanded today with the move up in price. MFI and RSI rose and stayed in the overbought region.  OBV rose higher which suggests increased accumulation. 

I look at the weekly chart for a glimpse of the longer term picture. The MFI, RSI and OBV are all rising.  MFI and RSI are not overbought yet. The MACD is still rising but in negative territory and its distance from the signal line is increasing. 

The bullish crossover with the signal line was completed five weeks ago.  Being in negative territory, this could just be a rebound but a strong one.  The increasing distance from the signal line is bullish but as the distance widens, bulls should turn cautious as the last four weeks have seen some big moves upwards.

The descending 100wMA is at 17.5c in the next session and this could be a formidable resistance.

STI climbs 1.3% to 3,025.04 at closing. Shares on the measure trade at 14.7 times estimated earnings, compared with about 17.5 times at the beginning of the year, according to Bloomberg data.
Monday, 02 August 2010

© 2010 - The Edge Singapore

Hyflux Water Trust: Privatisation.

Trading of units in Hyflux Water Trust (HWT) was halted today as a proposed voluntary delisting was announced. The exit offer price is 78c per unit in cash.  This represents a premium of almost 14% over the last traded price of 68.5c.  Read announcement here.

I still have 5% of my original investment in HWT left, having divested the rest in stages for capital gains.  I planned to keep this remaining investment as a no brainer passive income earner for the longer term as I bought these at 30c early last year and the DPU is about 5c per annum, giving me a yield of about 17%.  This is not to be, it seems.  Looking on the bright side, I will be getting back some money and booking a gain.

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Hyflux, Mitsui form venture, offer to privatize trust. Hyflux, which owns a 31% stake in the Hyflux Water Trust, plans to vote in favor of the privatization offer, saying that the global financial and economic crisis of the past two years has made it more challenging for the trust in securing project financing.

© 2010 - The Edge Singapore

Monday, 02 August 2010

Healthway Medical: Underlying strength.

The sell signal on the MACD in the last session was negated today. In fact, the MACD seems poised to do a bullish crossover with the signal line in positive territory.

The rising MFI shows unabating demand. OBV shows gradual accumulation. 18.5c has been established as immediate support.

The rising 50dMA seems to be on course to hit 18.5c soon.  Could this push the price of Healthway Medical's shares up at the same time?

Volume has been declining as price settled into a tight range of 18.5c to 19.5c. There were two sessions in which volume spiked but price was unable to break past 19.5c.  This shows that there are still sellers out there.  However, with the OBV gradually higher, the sellers might be thinning as more accumulate shares in the company.

Technically, this counter is looking interesting.  Could we see a breakout soon? In case of a breakout, we could see a retest of 21c, the high of 16 Jun.