Genting SP: Bollinger bands narrowing.

The Bollinger bands are narrowing on Genting SP's chart.  This usually precedes a large magnitude price movement. Would it be up or down? Your guess is as good as mine.

Yesterday, I mentioned that "the 20dMA was breached as recently as last week (and) does not inspire confidence that it would be a strong support". Today, price broke under the 20dMA and it seems that $2.02 is now resistance but this needs confirmation. Price could retreat to the recent low at $1.85 which could act as immediate support. If that breaks, we could see the rising 50dMA as the next support.

The MACD continues to decline beneath the signal line in positive territory while the MFI has formed a lower high. The correction is in earnest but overall momentum is still positive.

Related post:
Genting SP: Fatigue.

Hock Lian Seng: Retreating.

On 5 Oct, I mentioned that there was "strong demand and accumulation but buying momentum (was) muted by strong selling pressure at resistance (32c)" and that "I sold some of my shares at the 32c target .... Although I still see strong support at 30c where we find the rising 20dMA, 30.5c could very well be resistance turned support."

Today, Hock Lian Seng retreated and closed at 30.5c, the support provided by the 20dMA. However, the retreating price is on the back of much reduced volume and does not worry me. Could the support at 30.5c hold? With the MACD on the verge of forming a bearish crossover with the signal line, we could see share price tested further on the downside.  This is especially true when we realise that the MFI has been entrenched in overbought territory for a few sessions now. This could be corrected in future sessions.  The RSI has formed a higher high which suggests to me that the buying momentum is intact.

What would I do? Notice that the 20dMA has been guiding the price of this counter higher? See the uptrend support is in between the 20dMA and 50dMA? This would be at about 30c.  The 50dMA is at 29.5c.  I would buy more at these price levels.  For anyone who is not vested but would like to be, buying some at the 20dMA (30.5c) could be a nice hedge.

Related post:
Hock Lian Seng: Target hit.

AIMS AMP Capital Industrial REIT: Resistance.

This REIT's price action is testing 23c resistance, the upper end of the old trading range (20c to 23c).  Looking at the trade summary, of the 58 trades done, more than half (36) were buy ups at 23c but the volume was only 260 lots out of a total of 2,339 lots which changed hands.  This suggests to me that the buy ups at 23c lacked conviction.  23c is still a significant resistance to watch, it would seem.

Could 23c be taken out? The MACD has completed a bullish crossover with the signal line in positive territory. The MACD histogram buy signal has been confirmed.  OBV is up, suggesting accumulation.  MFI has formed a higher low, suggesting that the longer term demand is intact.  There is a chance that 23c could be taken out.  Then, the next resistance would be the recent high of 23.5c.

With all the daily MAs rising gently, this REIT could be on a sustainable uptrend and I would accumulate on weakness.

Related post:
AIMS AMP Capital Industrial REIT: Good value.

Japanese Yen at 15 year high.

I have been following news reporting on the strength of the Japanese Yen as well as the actions taken by Prime Minister Naoto Kan's team.  I am, naturally, very interested in economic and financial news from the Land of the Rising Sun as I am vested in Saizen REIT.

I applaud Bank of Japan's (BOJ) decision to cut its interest rate to zero recently.  This would, in theory, make credit cheaper and more readily available in the country. This would encourage borrowing and could possibly give the economy a shot in the arm. However, taking note that the interest rate was near zero to begin with (at 0.1%), cutting its rate to zero could have limited positive effects.

For investors in Saizen REIT, a strong Yen is good because we receive income distributions in S$. However, a strong Yen is not good for Japan as, being an exporting economy, a strong Yen reduces Japanese companies' competitiveness. As Japanese MNCs repatriate earnings back to Japan, a stronger Yen reduces the value of repatriated earnings. A stronger Yen could also propagate the deflationary spiral which Japan is suffering from.

While, as investors in Saizen REIT, we want to have a strong Japanese Yen, we want it strong enough to give us good returns (i.e. an attractive yield on our investment) but we do not want it so strong as to jeopardise the well being of the Japanese economy as that would, in time, have negative ramifications for Japanese residential real estate.

Latest update:
The dollar was trading at 82.36 yen in Tokyo midday.
08 October 2010 1231 hrs, CNA.

Related post:
Japan's debt issue and Saizen REIT.