Saizen REIT: More buying interest.

I received an email from a reader today saying:

"Seems like u like japan. Saizen see pick up in vol today and yesterday"

My reply:

"I like Japan a lot. Beautiful country, nice people, good food. Everything works. It is like Singapore but costs more.

"Saizen REIT is very undervalued. It is a matter of time that more investors take notice. It also takes time for its troubled past to fade. I have been holding for a year. I can wait a few more months."

Reader's reply:

"About one of your question, if the yield at 6.5% is attractive. I think the current yield is not attractive, and if the price goes up, the yield will fall further?

"Even though it has upside potential due to the NAV, it may be cap by the yield, unless the revenues improve?"

My reply:

"6.5% is attractive because the properties are Freehold. It is perpetual. If the properties are leasehold, then, it is not very attractive.

"For such a portfolio, a fair yield should be 5% which means unit price should be about 21c."

This reader is not the only person with negative perceptions or reservations about Saizen REIT, I am sure. There are also those who are worried about Japan's future which includes its debts and its demographics. I have voiced my opinion about these concerns before and you might want to read it here.

How do I feel towards these negative feelings and perceptions? Glad. Yes, glad.  There are still many doubters and the wall of worries is still intact. When everyone is bullish about something, that is a sign that we should think of exiting.

However, I noticed that there seems to be more buying interest in Saizen REIT today too. Of 3,260 lots that changed hands today, 2,968 lots were bought up at 16c. This could just be an anomaly or this could be the beginning of something bigger. Who can say for sure? A crack in the wall of worries? Perhaps.

The very thin trading volume of this counter makes TA unreliable but, for want of a better tool, let us look at the charts anyway. In end May and early October, Saizen REIT touched a low of 15c. It is interesting to note that the MACD has formed a higher low in early October. This is interpreted as a positive. The MACD has, in fact, moved higher into positive territory which suggests the return of positive momentum.

The MFI, a function of volume and price, is in oversold territory. The OBV does not show any big moves of accumulation or distribution. All the daily MAs seem to be bunching together. I have seen such a gathering before and likened it to a spring coiling up with tension. The 20dMA is set to complete a golden cross with the 50dMA. Immediate resistance at 16c.  Immediate support at 15.5c.

Let us now look at the weekly chart which could be revealing for a counter with such thin trading volume like Saizen REIT. It is immediately apparent that 16c is a formidable resistance level as that is where we find the merged 20w and 50w MAs.  However, the gently upturning 100wMA and the rising MACD which just did a bullish crossover with the signal line suggests that the longer term trend of Saizen REIT is positive.

Related post:
Saizen REIT: AGM on 19 Oct 10.

Golden Agriculture: Up or down?

Golden Agriculture's share price staged a recovery today, forming a short white candle, closing at 68c. Note that the price moved higher today on relatively low volume. Since 18 Oct, this is the counter's second attempt to move higher. We need to see volume expansion to have a meaningful upward movement in price that is sustainable at the same time.

Would the rising 20dMA be able to push the price higher? My suspicion is that sellers would turn out in force if price moves closer to 70c as it is a thrice tested resistance in recent memory.  Therefore, 70c remains the resistance to watch.

Critical support is at 65c. If this were to break with high volume, we could see price retreating to 61c, a possible resistance turned support and this is also where the rising 50dMA is approximating soon.

Golden Agri +5.3%; Positive press helps a tad: Analyst. Analyst adds, fundamentally, no impact on company, RSPO compliance actually a money-losing issue, estimates RSPO compliance cost at U$3/tonne. “It’s a PR issue for Golden Agri, and now they’ve got some positive press, the stock has moved up.” $0.705 recent peak may cap medium term.
Monday, 01 November 2010

© 2010 - The Edge Singapore

NOL: $2.21 and moving higher?

NOL's share price pushed higher today, forming a nice white candle, to close at $2.21, just 2c shy of the intra day high at $2.23. Volume expanded nicely as well.

All technical indicators show that the uptrend has positive momentum: MFI has formed higher lows suggesting a sustained demand and this is reinforced by the OBV which shows consistent accumulation. Every single pullback in NOL's share price in the past few months was an opportunity to accumulate, it would seem.

Taking in the Fibo lines, we could see 138.2%, which coincides with the high of 15 April, retested.  This is at $2.35. This, of course, is based on the assumption that the current bullish momentum follows through. With the MFI poised to enter overbought territory, taking some profits off the table in such a situation is not a bad idea although in extremely bullish conditions, the MFI could stay overbought for a long while.

Rare earth minerals: A new old frontier?

On 21 Oct, I blogged about rare earth minerals and how China mines 93% of the world's supply.  I concluded the blog post by saying "Mining almost all of the world's rare earth minerals, non-renewable resources which seem to have no viable alternatives at the current point in time, makes the Chinese a force as formidable as OPEC and possibly more."

Well, the recent belligerent attitude of China towards its trading partners in the West could possibly backfire at least in the rare earth minerals trading department as I read this just now:

The rising global demand for rare earth metals - the elements needed to make items like hybrid electric cars and laptop batteries - have caused the value of rare earths mining companies to soar in just a few months.

We've told you about one company, Rare Element Resources, that saw its stock surge 1200% in the last year.

But China's outright monopoly in the industry, along with fears that it will cut down on its rare earth exports, are driving plenty of other stocks higher too.

Posted Oct 28, 2010 01:00pm EDT by Gregory White and Hannah Kim, Yahoo! Finance.

Read article here.

Related post:
Control of non-renewable resources!