First REIT: Retesting high at 75c.

Today, First REIT hit a high of 75.5c before retreating to 75c, the high achieved on 2 and 3 Dec 10, adjusted for the recent rights issue. OBV shows ongoing accumulation while the MFI shows firm demand. The RSI has entered overbought territory but in very sanguine circumstances, it could stay overbought for a while more.

71c was a many times tested resistance which should turn strong support. It is also where we find the 50d and 20d MAs approximating. The 20dMA is also poised to form a golden cross with the 50dMA at this price level. Anyone who bought more units of First REIT, confident of its sound fundamentals during its recent troubled rights issue is now amply rewarded.

Could this REIT's unit price go higher? Your guess is as good as mine but you might remember that I have a fair value estimate of 80c per unit for this REIT. Apparently, OCBC Research thinks it is worth much more with a fair value of 84c per unit. The listed positives are:

1. Good quality assets.

2. Strong and committed sponsor.

3. Steady and sustainable income.

4. Potential upside.

Read the report at http://www.remisiers.org/cms_images/First_REIT-110107-OIR.pdf

Related post:
First REIT: Excess rights not enough.

Raffles Education: Resistance at 200dMA.

Raffles Education extended gains yesterday and closed at 30c, the resistance provided by the 200dMA. A wickless white candle was formed on the back of increased volume. OBV rose steeply, signalling accumulation. MACD rose into positive territory, signalling the return of positive momentum.

MFI and RSI rose higher, crossing into overbought territories. Although signalling heightened demand and positive buying momentum, the indices, being in overbought regions, suggested that further gains could be limited. This panned out today.

A doji was formed today, suggesting indecision. Although the momentum oscillators continue to rise, the OBV has flattened, signalling a stop to accumulation. The explosive rise in price could be at an end. Pull back could find support at 27.5c and 26.5c, as provided by the 100d and 50d MAs, respectively.

Related post:
Raffles Education: Sold at 27.5c resistance.

Raffles Education +5.5%; buybacks give confidence - Kim Eng
Thursday, 06 January 2011

© 2011 - The Edge Singapore

FSL Trust: Sold some at 48c.

Yesterday, I reduced my long position in FSL Trust at 48c, locking in some gains. You might remember that I sold some on 30 Dec at 47c. Then, I mentioned that "In a benign situation, I expect gap resistance at 46c to become support in the near term. This is further strengthened by the uptrend support line. Technically, the worst seems to be over for FSL Trust and a retest of resistance at 48.5c looks likely in time." 48c is just one bid away from 48.5c and selling some at 48c is a hedge in case price weakens.

A doji was formed yesterday, suggesting indecision, while the uptrending MFI broke its support when it emerged from the overbought territory a day earlier. Encouraging though some technicals might be with the MACD continuing to rise and the OBV showing no signs of distribution, the RSI was way overbought.

My long position in FSL is for a trade and the entry was not based on fundamentals, which are lacking. So, reducing my long position, locking in gains at resistance and at signs of weakening demand, at least partially, is prudent although it could limit gains in case of further price appreciation.

Today, 48c remains the resistance as a gravestone doji was formed. The stalemate between bulls and bears is obvious but it seems as if the bulls are tiring. Further upside seems difficult and could be limited to a retest of the high of 48.5c touched on 21 Oct 10. A pull back would see immediate support at 46c which is also where the 20dMA is rising to form a golden cross with the declining 200dMA.

Related post:
FSL Trust: Sold some at 47c.

What are the charts forecasting for 2011?

When I initially started out on Technical Analysis, I would see how seasoned chartists like Michael Kahn, Goola Warden and Daryl Guppy read the charts. So, I am excited that Daryl Guppy will be sharing his views on the stock market outlook for Singapore investors in 2011 very soon.

Daryl Guppy is a regular commentator on CNBC Asia and is known as 'The Chartman'. He is recognized globally for the quality of his analysis. He actively trades equities and associated derivatives markets. Daryl has also developed several leading technical indicators used by traders, and is recognized as an expert on China markets.

We can also learn how to use SiMSCI warrants to take a leveraged view on the Singapore market without the need to stock pick.

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More on SiMSCI warrants at
http://singaporeanstocksinvestor.blogspot.com/2010/11/best-way-to-trade-singapore-index.html

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