SPH: Waiting for elusive $4.20.

On 1 Sep, I mentioned "if SPH does retest $4.20, I expect that to be a strong resistance as many who missed selling then would sell now.  So, I would sell some at $4.20 and buy back if price retraces to the 20dMA."

I reckon that many investors and traders are able to read charts and many know that SPH's resistance is at $4.20. When too many people anticipate something happening, then the event might not take place. Market participants are wary of buying too close to $4.20 as they recognise that as buying close to resistance.  Market participants waiting to sell at $4.20 might sell at a few bids lower just in case the resistance does not get retested.  In such a scenario, we need a day or two of massive buy ups to clear all the doubt and suspicions surrounding the major resistance.  In this case, it is $4.20.  How likely is this? Your guess is as good as mine.

Technically, it is easy to spot a short term negative divergence between price and volume. This probably explains the weak push upward in price as volume is the fuel that drives rallies. Today, the MACD histogram turned red.  This is a warning that price could face more downward pressure in the near future. The MFI and RSI are rising strongly into overbought territory and such overbought situations could not last too long, normally. Notice how the rising OBV is much gentler in its gradient in recent sessions.  Although there is no distribution, accumulation is slowing down.

Should we panic? Should we sell? The uptrend is still intact.  I want to draw your attention to the orange color trend line support I have drawn.  This would approximate $4.10 soon.  You want to also take a look at $4.13.  This looks like a natural support level and should serve as immediate support but, of course, it needs confirmation.  I expect some semblance of support between $4.13 and the orange color trend line support in the immediate term.  If these supports break,  look to the individual rising daily MAs for the next supports.

Related post:
SPH: Another white candle.

STI little changed at 3,036.09 at closing
Tuesday, 07 September 2010

© 2010 - The Edge Singapore

AIMS AMP Capital Industrial REIT: Buying up.

There has been quite a bit of buying up activities in this REIT in recent sessions.  Today, of the 2,595 lots transacted, 1,763 lots were bought up and, of these, 843 lots were bought up at 23c.  From the transaction sizes, it would seem that there is some amount of interest returning to this REIT from retail investors.  Why buy some units of this REIT now?  The attraction, I suppose, is the entitlement to rights at a price of only 15.5c.  Of course, unit holders will also be able to apply for excess rights and in the process, possibly, improve the overall yield of their investment.

A while back, some readers asked me if they should buy in at 22c and my advice was that it was a fair price.  Buying 20 lots at 22c would give us 7 rights at 15.5c.  That would give us an average price of 20.31c.  With an estimated DPU of 2.08c per annum, XR, that gives us a yield of 10.24%.

Technically, the MACD has completed a bullish crossover in negative territory. If the MACD crosses into positive territory, that signals a return of positive momentum. The MFI has just emerged from oversold territory and has formed a higher low which suggests a return of demand. A recovering OBV suggests some accumulation is underway.

For a second session running, this REIT is trading above all the daily MAs.  22.5c could possibly be resistance turned support.  This needs confirmation.  The long term resistance remains at 23c but remember that this was compromised in early August.  So, it is not as strong a resistance as it once was.

Related post:
AIMS AMP Capital Industrial REIT: Sell the rights.

Genting SP: Staying cautious.

The cautious tone in Genting SP continues today. There is talk that speculators have moved from Genting SP to Genting HK, contributing to the latter's spectacular run up in price.

Technically, the negative divergence between price and action here is rather glaring. Price has detached from the upper Bollinger and moved sideways. This could be the start of another consolidation period.  The detachment from the upper Bollinger is accompanied by reducing volume which is a good sign for the bulls.

Look at the MACD and we see it still rising above the signal line in positive territory.  Bulls want to watch out for signs of a bearish crossover with the signal line.

The MFI, although declining, formed a higher high before doing so and is still above the longer term uptrend support. OBV has flatlined in the immediate time frame but its longer term rise is unbroken.  Demand and accumulation seem healthy.

For anyone with a long position here, congratulations but look to the support at $1.70 for guidance.  If this support breaks, it might be a good idea to take some profit off the table as the next support is at $1.50.

Related post:
Genting SP: Flip flop.

Genting Hong Kong +3.6%; Earnings growth priced in: UOB
Monday, 06 September 2010

© 2010 - The Edge Singapore

STI climbs 1.1% to 3,034.58 at closing
Monday, 06 September 2010

© 2010 - The Edge Singapore

China Hongxing: Pushing upwards.

On 3 Sep, I suggested that China Hongxing might be taking a break with the near term resistance at 18c. Today, volume expanded significantly as the 18c resistance level was demolished.

Momentum oscillators are trending higher, forming higher lows.  The MFI's rise shows strong demand while the OBV's upward climb shows accumulation continuing. The MACD is still rising above the signal line in positive territory and the distance between the two is growing, a sign of strength.

On the flip side, the RSI is going into overbought territory, suggesting that the buying momentum is getting somewhat overdone.  Jumping in at this juncture to go long might be a risky proposition as the immediate upside target identified some time back at 19.5c seems within reach.

If price action starts detaching from the upper Bollinger and if the MACD's distance from the signal line starts narrowing, we could be seeing precursors of a reversal. So, we have to stay cautious and keep our eyes peeled.

Related posts:
China Hongxing: Taking a break.
China Hongxing: Retesting resistance.