K-Green Trust: Weak technicals.

In my first blog post on K-Green Trust on 3 July, I mentioned that "I would be quite happy to collect some units at $1.00 which would give a yield of 7.82% to begin with." With its price in decline lately, could I get my wish?

On 22 August, I said that "a near term support seems to have formed at $1.10" and "I would buy some at the current price of $1.11 instead of waiting as per my original plan". I also said "With an estimated yearly DPU of 7.82c, buying at $1.11 would give a yield of 7.05%."

Well, as things turned out, K-Green Trust's support was at $1.09 and this broke on 21 Oct. Today, price closed at $1.06, a natural candlestick support level. This could break and a stronger support would be at $1.04. Could we see $1.00 eventually, the buy price I thought of in my maiden post on the trust?

With the lower highs on the MFI and RSI plus the MACD plunging in negative territory, we could see price going lower in the near future. Look at the OBV and we see ongoing distribution. All technicals point to a higher probability of price going lower.

Related posts:
K-Green Trust: A stable source of passive income.
K-Green Trust: Possibly stabilised.

China Hongxing: Correction.

Recently, a reader asked me what do I think of China Hongxing. I have not done any fundamental analysis of this company, having gone in only once for a trade based on technical analaysis.

Looking at the charts, the 20d and 50d MAs are about to complete a dead cross while the MACD is declining in negative territory.  Momentum is clearly negative.  However, look at the OBV and we would notice that there is no massive distribution.  In fact, a quick look at the trading volume confirms that volume has been dwindling as price declined from the peak formed on 15 September. A low volume pullback is underway, it seems.

The 100dMA has just completed a golden cross with the 200dMA at 16c.  This is likely to be strong support level and would be ideal as an entry to go long on this counter. In the meantime, 17c is immediate support and could be a nice hedge in case price does not test support at 16c.

Related post:
China Hongxing: CD.

Marco Polo: BUY call by KIM ENG.

This could have happened in early October. A relative of mine bought some Marco Polo at 48c after reading a BUY call by Kim Eng with a target price of 60+c.  I cannot remember the exact target price now.  On hindsight, that was a high and price has been retreating since.

Although price closed at 43.5c today, the uptrend is still intact.  Connecting the lows of 2 June and 31 August makes this quite apparent. The MACD dipped into negative territory last week and together with the momentum oscillators, it paints a negative picture. The OBV shows massive distribution took place on 5 October and it has not shown any signs of sustained accumulation since.

What do we do if we want to go long here? We either wait for signs of a positive divergence or for price to test longer term MAs before entering.  The 100dMA is currently at 42.5c.

If we look at the weekly chart, we see that the rising 20wMA looks like it could form a golden cross with the 50wMA in another few weeks. The rising 100wMA is at 39.5c.  This MA has proven to be a strong support earlier this year in May/June. It is more reliable as a support than the 100dMA, therefore.  Based on the weekly chart, the longer term picture looks fairly good.

These observations are based purely on TA which is about probabilities. You have been cautioned. ;)

Healthway Medical: A floor at 15c?

On 20 Oct, I mentioned that "A gravestone doji formed today as price closed at 15.5c.  As the MFI is in very oversold condition, price could experience a brief rebound and it might be a good chance for stale bulls to lighten their long positions, if any. Strong resistance could be expected at 17c.  This is where we find the 200dMA and it is also where the falling 20d and 50d MAs would be approximating soon."

Two identical dojis formed one after another. One today and one in the previous session. Both closed at 15.5c. Both with a low of 15c. It would seem that Healthway Medical's share price has found a floor at 15c. The volume today was much lower than that of the previous session. This coupled with how dojis suggest indecision indicates a reduction in selling pressure which could help lay the foundation for a rebound or reversal. Indecision in a downtrend is good news for bulls.

The MFI is deep in oversold territory. The RSI is also in oversold territory. The OBV has gone flat, suggesting a respite from distribution activities. Could this be a false calm? Personally, I do not think that the downtrend has played out its full potential.  The lower highs on the MFI and RSI suggest negative demand and momentum and the price action of the counter is obviously caught in a down channel but it is now possibly at channel support. 

Therefore, a rebound to 17c remains probable and it still looks like it would be a good chance for stale bulls to lighten their positions in such an instance.

Related post:
Healthway Medical: Business diversification.