Charts in brief: 8 April 10.

CapitaMalls Asia: A doji, another reversal signal, was formed today with price closing at $2.29 with the lowest volume in weeks.  A reversal signal again?  Dare I hope?

Golden Agriculture:  Yesterday, I said that with "both the MFI and OBV turning down, which suggest reduced buying momentum and the presence of some distribution, the black spinning top possibly signals a reversal".  The counter went to touch a low of 59c today before closing at 60c.  MFI and OBV continue to decline and we see a sell signal on the MACD. If we look at the chart, the 20dMA has not been very reliable as a support in past instances.  I would look to the 50dMA instead this time for a strong support.  It is currently at 55c.

Saizen REIT: A black candle day as price closed at 17c on lower volume.  Likely short term profit taking.  It is quite clear from the chart that 17c was a resistance level since 22 Jan 10.  We need confirmation in the next few sessions to see if 17c is resistance turned support.  If it is, chances are that price action would be forming a new base at 17c before moving higher.  Such is the slow motion rise of Saizen REIT but the longer term MAs are rising and there is no question that the longer term uptrend is intact.

Healthway Medical: Another gravestone doji as price closed unchanged at 16.5c.  This is somewhat impressive but with the 20dMA and 50dMA both completing their downturns, a move downwards to critical support at 16c looks most likely in the near term.  The MFI has also formed a lower high and this suggests that buying momentum is definitely weakening.

SPH: Reversal signal was negated as SPH formed a nice and long wickless white candle, closing at $3.94.  OBV is rising strongly as accumulation carries on.  MFI has flattened and is not overbought.  A push towards $4.00 is now looking very likely.

AusGroup: Touched a high of 64c on respectable volume but closed at 62c.  This candlestick is very bearish.  63c remains the immediate resistance.  On top of this, the MACD has a sell signal.  However, the MFI has formed a higher low.  This suggests that buying momentum is still strong.  OBV suggests that there is no distribution yet.  AusGroup might try to push higher again but things are looking dicey.

Oceanus: Sell signal confirmed today on the MACD.  Price closed at 36.5c which is support provided by the 100dMA.  We will need confirmation whether this is the new support level.  If it breaks, next support is at 35c.

Genting SP: Volume shrank as price closed at 89.5c.  It would be interesting to see if it continues basing at this level or moves to test the recent low of 83.5c in time.  With MFI and Stochastics near oversold regions, I do not expect any drastic downward movement in price if news stay benign.

China Hongxing: No follow through from yesterday as price formed a black candle, resisted by the declining 50dMA.  Immediate support remains at 15c.  Fundamentally, the company has many challenges and made some bad decisions last year.  The slightest positive newsflow in such a situation might have a strong positive impact on the share price.

Some readers asked if I am vested in all the counters I cover.  I'm not.  I am not vested in the last four counters here, for example.  I do the TA for these for various other reasons.  If you happen to be vested in these counters, I hope the TA is useful to you.

Related post:
Charts in brief: 7 April 2010.

To Raelynn and Jason.

Dear Raelynn and Jason,

For some strange reason, Blogger has been acting up and some of the comments in my blog have mysteriously vanished.  I have checked with the blogmaster of Bully the Bear and it happened to him too.

Today, I received three comments for moderation but upon clicking, there were only two comments.  One went missing.  The two remaining comments are from the two of you.  To the writer of the missing comment, you might want to send in your comment again.

I clicked to publish your comments and it seems they have now gone missing.  So, I am posting in my blog to let you and other readers know that we have a problem with disappearing comments right now with Blogger.  I hope it gets resolved soon.

Raelynn,

Learning FA and TA takes time.  I am still learning and that's the honest truth.  :)  It is something that you and your partner can do together.  It's more enjoyable to have someone close to share the learning process. 

You are also right about how FA for REITs and FA for companies would look at different things.  In my reply to Jason below, you will see how I have overlooked an aspect in my analysis of Courage Marine as shipping is an industry I am new to.

As for CapitaMalls Asia, its parent is Capitaland.  We can say that CapitaMalls Asia is the parent of CapitaMalls Trust and CapitaRetail China, I suppose, or maybe it could be more accurately referred to as their sponsor?

That's all I can remember from your comment.  If I have missed anything out, please let me know.

Jason,

Yes, you are right about what is lacking in my research on Courage Marine.  I have considered current capacity and I have considered how the excess capacity has to be soaked up first and that shipping companies would not at this point in time place order for new ships but I have neglected the additional capacity that might be coming on line. 

Shipping is a new industry for me. Please, do share with us the information you have from your occupational hazard.  Much obliged.  :)

Charts in brief: 7 April 2010.

CapitaMalls Asia: Closed unchanged at $2.28 after touching a high of $2.31, forming an inverted black hammer, which, by the way, is another possible reversal signal.  We have been getting many of these reversal signals and none has followed through thus far. MFI has turned down but OBV is flat.  Overall, the suggestion is that the price has found support and is currently going through a basing process.

Golden Agriculture: First black candle in many days and a spinning top at that.  With both the MFI and OBV turning down, which suggest reduced buying momentum and the presence of some distribution, the black spinning top possibly signals a reversal.  Channel resistance is at 64c but will the price move to test this before the week is up? It could happen but, technically, it is obvious that weakness is setting in.

Saizen REIT: Volume has expanded for four days in a row with price closing at 17.5c, forming a wickless white candle, today.  The MFI has surpassed the previous high and is nowhere near overbought.  The buying momentum could strengthen.  OBV has risen sharply, suggesting heightened accumulation.  The MACD continues pulling away from the signal line on the upside, which is bullish.  The declining 50dMA has now turned up, joining the 20d, 100d and 200d MAs in cutting out ascending paths.  The Bollinger bands are just beginning to widen. A move to test the previous high at 18c seems close at hand.

Healthway Medical: Despite a rising MFI, suggesting some positive buying momentum, price action formed a gravestone doji today. Even more ominous, we see the 20dMA beginning to turn down.  MACD is moving closer towards zero.  Unless some heavy volume buy ups happen in the next two or three weeks, the 20dMA seems destined to form a dead cross with the 50dMA and the MACD would be in negative territory.  Support remains at 16c and if this breaks, we should see stronger support at 15c.

SPH: Slight reduction in volume today as the MFI turned down.  OBV is still rising as accumulation continues unabated.  However, the white spinning top formed today suggests indecision.  If this is confirmed as a reversal signal, the journey towards $4.00 would be aborted and $3.82 is the immediate support.

AusGroup:  It seems that 63c remains insurmountable for now.  Price formed a doji, closing at 62c, today.  Although MFI has formed a new high, volume has reduced slightly over a three day period.  There is still a chance of 63c being taken out but volume has to expand on renewed buying ineterest for this to happen.  If volume dwindles, a downward move towards support at 60c is more likely.

Oceanus:  Touched a high of 38c but closing at 37c, price formed a gravestone doji today.  We have a sell signal on the MACD.  Immediate support at 36.5c.  This is where we find the flat 100dMA.  Stronger support is to be found at 35c, where we see a confluence of the 20d, 50d and 200d MAs. Recap: Oceanus.

Genting SP: Touched a high of 92.5c but was resisted by the 20dMA and closed at 90c. Genting SP has emerged from its downtrend in mid March and is now moving sideways. The stochastics and MFI are both near oversold territories.  Price seems to have found support for now and further weakness is expected to be mild if news remain benign. Recap: Genting SP: Obvious downtrend.

China Hongxing: This counter broke out today unexpectedly on high volume, touching a high of 16.5c, it closed at 16c, resisted by the declining 50dMA.  If it manages to close above 16c in the next session, the upside targets are at 18c (100dMA) and 19c (200dMA).  Immediate support is provided by the upturning 20dMA at 15c.  Breaking 16c convincingly would most probably see punters coming in to push it higher towards 18c. Recap: China Hongxing: Downside target?

AIMS AMP Capital Industrial REIT:  Price opened and closed at 22c today, forming a dragonfly doji.  This is the first time it has happened since end January 2010.  We also see a buy signal on the MACD.  OBV is up.  MFI is up.  The Bollinger bands look to be on the verge of widening and if that follows through, this counter is probably going to test the top of the base formation at 23c although, from a chart pattern perspective (where I look out for symmetry), it seems a tad early.  Indeed, the low volume seen today adds an element of caution. Recap: Charts in brief: 19 Mar 10.

LMIR: This counter has to close above a bunching of MAs which are supports turned resistance.  If price could close firmly above 49c in the next few sessions, this objective woud have been achieved.  MFI is rising towards 50%.  Stochastics is rising from the oversold region.  The rising 200dMA is at 47c and should provide support in the event of further weakness. Fundamentals remain strong and I would accumulate on weakness.  Recap: LMIR: More units at 10% yield.

Related post:
Charts in brief: 6 April 2010.

Comments on the US economy.

Yes, It's a V-Shaped Recovery: Risk of Double-Dip "Relatively Low", Liz Ann Sonders Says.
Posted Apr 05, 2010 10:05am EDT by Aaron Task



"I'm amazed people still say it's not a 'V'-shaped recovery, which to means they're simply not looking at the charts," says Charles Schwab's chief investment strategist.

Bear Market in Bonds Could Trigger "Melt-Up" in Stocks, Sonders Says.
Posted Apr 05, 2010 11:50am EDT by Peter Gorenstein

 

 
The Dow Jones Industrial Average is on the verge of 11,000 for the first time in 18 months on the back of Friday's positive jobs report and Monday's better-than-expected reports on pending home sales and ISM services, a private trade group measure of the U.S. service sector.

Charts in brief: 6 April 2010.

CapitaMalls Asia: No follow through on the reversal signals seen in earlier sessions.  This is becoming a habit for this counter. The ugly black candle formed today is on the back of lower volume and the price closed at the support provided by the 50dMA at $2.28. MFI and OBV have gone flat in the meantime.  This counter is likely to trade sideways for a while if such conditions persist. Such a consolidation period took about a month to play out from late January to late February.

Golden Agriculture: MFI and OBV continue to rise.  Positive momentum and accumulation are very much the order of the day.   Trendline resistance is at 63.5c.  If this breaks on much increased volume, price action could go parabolic like what happened in early January this year.  If this holds, a retreat to the channel support is likely.

Saizen REIT: Some sceptics I know are now convinced that Saizen REIT is a buy based on its compelling valuation. Today, Saizen REIT traded at one price and one price only, 17c.  At 9.35AM, the entire sell queue of 1,237 lots at 17c was snapped up in a single transaction.  A friend who stubbornly refused to buy any at 16.5c and was waiting at 16c for weeks has missed his chance, it would seem.  Saizen REIT's longer term uptrend is intact.  The rising 100dMA is now at 16c and the rising 200dMA is at 15c.  The MACD is beginning to pull away from the signal line on the upside and we might be witnessing the beginning of more upside to come but given Saizen REIT's slow motion rise so far, I wouldn't hold my breath.  However, I believe patience will be rewarded.

Healthway Medical: Traders are getting tired of waiting for this counter's price to move up. The excitement that surrounded the news of plans to grow the business in China and the buy calls by DMG and Partners has become a distant echo. Many have thrown up their hands in despair. Today, we see the OBV going through an obvious decline, the first since 25 March. The fact that this happened as MFI turned up is somewhat ominous. Price touched a low of 16c and closed at 16.5c on much higher volume compared to the last session. The MACD continues to approach zero and more near term weakness is likely. I will wait and see if the support at 16c holds up.

SPH: OBV is rising sharply, suggesting strong accumulation. MFI, although not overbought yet, is tapering off, suggesting that buying momentum is mellowing a bit. I maintain an eventual target of $4.00 which would probably be hit once price is able to close above $3.90 convincingly.

AusGroup: Not being able to close above resistance provided by the merged 100d and 200d MAs at 63c, price retreated to 61.5, a resistance turned support. Whether 61.5c could hold up as support will need confirmation. Good news? The pullback happened on lower volume than the buy up yesterday. If 61.5c breaks, immediate support is at 60c. Recap: Ausgroup: An update.

Related post: Charts in brief: 5 April 2010.

Charts in brief: 5 April 2010.

CapitaMalls Asia: Buy signal confirmed on the MACD. OBV continues to rise, signalling accumulation.  MFI rose, signalling a return of buying momentum. Stochastics has turned up from the oversold region.  Price action formed a black spinning top with price closing at $2.31, still resisted by the 20dMA.  Volume remains anaemic and needs to expand to have a meaningful move up in price. Recap: CapitaMalls Asia: A late reversal?

Golden Agriculture:  Volume expanded as price pushed higher but it formed a bearish inverted hammer as price closed at 61c after hitting a high of 62c.  In the event of a pullback, it would be interesting to see if 60c could be a strong support.  Expectation is that it is early days yet for it to be so.  Expect strong support at 57.5c, a many times tested candlestick resistance and 50% Fibo line.
Recap: Golden Agriculture: Further divestment at 60c.

Saizen REIT: A nice bump up in price, closing at 17c and forming a dragonfly doji. This is the first time since 21 January that Saizen REIT has closed at 17c or higher.  All the momentum oscillators are rising and it might not be too much to hope that Saizen REIT would be moving higher sooner than later. Recap: Saizen REIT: 1627 lots bought up.

Healthway Medical:  A couple of readers asked me if I am still vested in Healthway as I have gone quiet on the counter.  I still have a smallish position in the company and I still look at its charts daily but there is nothing much to say.  The uptrend has clearly stalled and the counter is currently consolidating.  The 20dMA at 17c is now the new resistance and immediate support is at 16c, which is provided by the 50dMA.  The MACD continues to fall but the OBV is flat.  This suggests that buying momentum is weak but there is no obvious distribution.  So, I don't expect the price to crash but the consolidation could go on for a while. Recap: Healthway Medical: Touched 16c.

SPH: Closed at $3.88, high of the day, an obvious breakout from the very long term resistance at $3.82.  $3.82 was a support level that was breached in July 2008 and finally gave way in September 2008.  This is the first time since then that SPH has closed above $3.82.  It has been 18 months!  We will need confirmation that $3.82 is now resistance turned support.  Eventual target is S$4.00 in such a case.

Credit Suisse on the Japanese economy and JPY.

Credit Suisse thinks that the Japanese economy will continue to improve for the rest of 2010 and that the Yen will strengthen.  Is this also a reason why Credit Suisse is now a substantial unitholder of Saizen REIT?  I wonder.

31 March 2010
Bloomberg



Related post:
A tale of two reversals and Saizen REIT.

Foreigners' views on Japanese real estate.

These are some clips I found on YouTube which show recent perspectives of foreigners on Japanese real estate.  It is gratifying to see how they feel that the prices of Japanese real estate are reasonable and that there are great opportunities to be found in a real estate market that has suffered deflation for 20 years.  Marc Faber isn't the only contrarian in the world, after all.

07 Dec 2009
Someone from Perth bought a house in Japan and thought it a bargain.



21 Dec 2009
A video clip from Jones Lang Lasalle in Japan on Corporate Real Estate (CRE)  and how the returns in Japan can be big and is something to think about.



01 April 2010
This one is really interesting.  A group of English teachers in Japan are developing residential real estate in the country and are trying to get more foreigners to invest in Japanese real estate saying that "it is a very satisfying investment area".



Related posts:
Buy Japanese real estate.
Saizen REIT: A symmetrical triangle.
Saizen REIT: March 2010 presentation.

Courage Marine: Riding the waves of recovery.

Admittedly, I have always thought of the shipping industry as a very difficult one.  Huge capital expenditure is required and the ongoing maintenance expenses are substantial as well.  I also do not like how its huge capital expenditure is on assets which are depreciating in nature.  Furthermore, its fortunes are tied inextricably with those of the global economy.  So, during difficult times like the recent crisis, shipping companies suffered badly.  Anecdotal evidence tells of hundreds of ships anchored off the shores of Singapore, idling away as there is too much spare capacity.

However, I am very much aware of the global economic recovery which is now well underway.  I targetted mainly three stocks in the second half of 2009: Healthway Medical for its defensive growth model, Golden Agriculture for the increasing demand for CPO and Saizen REIT for the compelling valuation and a contrarian play.  This year, I also increased my exposure to LMIR and AIMS AMP Capital Industrial REIT. Lately, I became interested in CapitaMalls Asia as I believe it would benefit from the rise of the Asian consumers.

Recognising that the global economic recovery is going to strengthen in 2010, it would be pure bigotry for me not to consider the shipping industry as a logical beneficiary. Latching once more on the theme that Asia is leading the world in this recovery, I decided to look at shipping companies with more of an Asian exposure.

Having learned some valuable lessons from this past crisis, I decided that the company I invest in should not have high gearing and it should be one that could control its costs well.  These factors are crucial for the survival of a company in hard times.  In this last crisis, many companies issued rights and even NOL went to shareholders with hat in hand despite having a powerhouse shareholder like Temasek Holdings:

"NOL's proactive capital raising will strengthen its balance sheet, enhance its financial flexibility and allow it to seize investment opportunities," Ong Beng Teck, managing director of investments at Temasek said in a statement. June 2, 2009 (REUTERS).

By some stroke of luck, the first shipping company I looked at in detail, Courage Marine, a dry bulk shipping business, has many of the qualities I am looking for. Established in 2001, the company has exposure primarily in Greater China.  This is their niche in the industry and fits well with my aim to look for a company which will benefit from a stronger and recovering Asia.

Being wary of the large capital expenditure that shipping companies have to make, I was very pleased to find that Courage Marine only buys and operates second hand vessels.  This maximises return on investment and minimises depreciation cost. Of course, what I then worried about was the cost of maintenance but they have been able to manage this as well, keeping cost of maintenance low.

I suppose this is the same rationale that buying a second hand car makes more sense than buying a new car for us common folks most of the time.  A new car depreciates rapidly in the first three years of its life.  If the cost of maintaining a second hand car is less than the premium we have to pay in order to buy a new car, it's a no brainer.

Next, I looked at gearing.  Courage Marine has very low gearing.  Gross gearing as of 31 Dec 2009 was at 6.2%, a reduction from 8.5% a year ago.  Taking into consideration that they have cash and cash equivalents of more than US$43m and total debt of only US$6.8m, Courage Marine is in a net cash position!

Courage Marine is not immune to economic slowdowns but through prudent management, it managed to reduce its debts and declare a dividend of US 0.47c per share for the year ended 31 Dec 2009.  Based on the last done price of S 20.5c, that is a yield of 3.1% (based on US$1 = S$1.37).  Not too attractive but try looking at the preceding three years when it declared dividends of US 1.888c, US 3.115c and US 1.41c.  Sounds more interesting?  This is a company that shares its profits with its shareholders.

Courage Marine has a NAV of US 10.41c per share.  At an exchange rate of US$1 = S$1.37, the NAV is S 14.26c per share.  At the last closing price of S 20.5c, it is now trading at a premium of 44% above NAV which I do not think is expensive.

Finally, what really caught my eye is the strong return to profitability in the fourth quarter of 2009.  Compared to a year ago, gross profit in the fourth quarter increased 523% and net profit margin improved to 25.9%!  I fully expect its revenue and profits to continue improving in 2010.  Taking last quarter's EPS as a guide, assuming that things stay stagnant, Courage Marine would have an annual EPS of US1.08c or S1.48c which, based on a share price of 20.5c, gives a PE of 13.85x.  Not expensive.  EPS is more likely than not to improve in 2010.

Courage Marine is a company that has a niche in the shipping industry.  It capitalises on its expertise in that niche and concentrates on what it knows best.  It is excellent in managing costs and it is conservative when it comes to financing new capital expenditure.  All these characteristics, I believe, translate into a strong competitive edge and business resilience.

When I arrived at this conclusion on 26 March, the next step was to look at the charts.  Its price closed at a high of 21.5c that day.  To me, 21.5c looks like the top of a base formation and I decided to wait and see if it would break out or retreat.  The next day, it went on to touch a high of 22.5c.  I thought I had missed the boat (pardon the pun) after all the FA that I did.

Fortunately for me, the price weakened to 20c on 31 Mar and seeing that it's where the flat 200dMA is and seeing how the rising 20dMA might just push up the price, I bought some then.  There is a chance that price might weaken further seeing how the MFI is in the overbought region but as the OBV does not suggest any heavy distribution activity, I believe that downside should be limited, perhaps to 19c, the confluence of the 100dMA and 50dMA.  A retest of the previous low would mean a floor of 17.5c although I do not think this likely.

I believe that Courage Marine is a well run company that is riding the waves of recovery and the market will recognise this in the usual way.  I would accumulate on weakness.

CapitaMalls Asia: A late reversal?

I spent a few hours in Ion Orchard today shopping with a friend who just moved into his new home.  Always nice to shop for things for a new home and watching someone else spend money.  It's a very therapeutic experience without any real damage to my own wallet.  What was an eye opener was the crowd at Ion Orchard.  The place was CROWDED!


I have a knack for catching bits of conversations of passers by and I must say I was amazed by how many foreigners there were.  There were Koreans, Chinese, Indonesians and Japanese.  Of course, there were Caucasians too.  These foreigners are now an important part of our domestic economy.  Their consumption contributes to a healthier GDP for Singapore, I have no doubt.  More importantly for me, CapitaMalls Asia owns 50% of Ion Orchard.  That makes me happy.

Fundamentally, CapitaMalls Asia is a company with solid numbers and technically, it seems as if it has started a reversal process having hit $2.26 two sessions ago.  The OBV shows that no distribution is taking place.  The Stochastics is now in oversold region.  The MFI still shows a slowing buying momentum.  The MACD has flattened while the signal line continues to fall, suggesting a possible bullish crossover in the making.

Price action formed a white candle in the previous session and actually broke resistance provided by the 20dMA at $2.31 at one stage, hitting a high of $2.33 before closing the session at $2.30.  All these after I suggested that the inverted black hammer in the preceding session was a possible reversal signal.  A reversal is confirmed... again.  Why again?  Well, you would remember an earlier reversal signal was confirmed but there was no follow through.  The problem? Anaemic volume.

It is quite obvious when we look at the Bollinger bands that CapitaMalls Asia has entered a consolidation phase.  There really isn't any trend per se.  So, I would like to draw your attention to the Stochastics.  In the reversal signal which did not follow through successfully, the Stochastics was not oversold but now, it is.  The chances of a successful reversal is now higher.

It is quite obvious to me that the top of this basing process is at $2.41.  However, getting there is going to take some time given the falling buying momentum as suggested by the declining MFI.  However, the lack of distribution as suggested by the OBV precludes any drastic downward movement in price.  Thus, the low of $2.19 is likely to be a strong support if any further downside presents itself.

My reading: Limited downside at $2.19.  Immediate resistance at $2.31 provided by the 20dMA and this is followed by $2.41, the top of the base formation.  Eventual target is at $2.55, a many times tested candlestick resistance.  If price continues basing with an upward bias as per my expectations, what we might see forming would be a double bottom formation.  Important: Volume has to expand with any move to the upside and this would see the MFI reversing its decline.  Vested.

Related posts:
Replies from AK71: CapitaMalls Asia.
CapitaMalls Asia: Reversal confirmed.

Golden Agriculture: Further divestment at 60c.

I hope Golden Agriculture made many happy today as the reversal signals seen a few days ago followed through nicely.  The price closed at 60c today, the previous high. My overnight sell queue at 60c was done towards the end of the day.

Looking at the chart, it is obvious that Golden Agriculture is firmly back in the uptrend channel.  Price action formed three wickless white candles in a row, reminiscent of a pattern which chart watchers call the Three White Soldiers and this pattern could signal more upside to come.

MFI rose above 50% convincingly, signalling positive buying momentum.  OBV continues to rise, signalling continuing accumulation.  The MACD has crossed the signal line in a bullish crossover.  All the momentum oscillators are bullish and also hint of more upside to come.

I have drawn some Fibo lines to determine the next resistance levels to watch in case of further upside.  I would like to draw your attention to 63.5c and 64.5c as these would be in closer proximity to the uptrend resistance in the course of the new week.  64.5c was also the closing and opening prices of the peak achieved in mid January on the 11th and 12th respectively.  This price would likely be fresh in the memories of market participants and would thus be a strong resistance.  I do not expect it to be taken out for now but I could be wrong.

Bugbear? Volume has not expanded in this latest move up in price and this suggests that we should not be too euphoric. I have put my remaining Golden Agriculture shares in the queue to sell in case its price hits the resistance levels I have identified in the preceding paragraph.

Certainly, from a fundamental perspective, the very strong showing by crude oil which is trading at almost US$85 a barrel as of now might have a spillover effect on crude palm oil and this would surely benefit Golden Agriculture.

Related posts:
Golden Agriculture: Reversal confirmed.
Golden Agriculture: Partial divestment at 57.5c.

Unique visitors: Crossing the 40,000 mark.

It might be a cliche but time really flies.  It has been slightly more than three months since I started this blog last Christmas Eve. Has it been so long? It feels like I just started blogging last week.  I guess we don't feel the passage of time when we are doing something we enjoy.

Blogging has introduced new groups of people in my life.  I used to simply share ideas with friends and family but I am now sharing ideas in cyberspace and reaching out to a wider audience.  I have made contact with fellow bloggers and I have many visitors to my blog, some of whom have left comments and exchanged ideas with me. My social life has become a tad fuller.

Today, the number of unique vistors to my blog crossed the 40,000 mark.  This is overwhelming and I am truly humbled by the support my blog has received so far.  I guess I must be doing something right here.  Although this is really a personal blog, your support and encouragement give me that little push to continue blogging and sharing my ideas.  Thank you very much and have a great long weekend. :)


Thank You Images

AusGroup: Update.

AusGroup seems to have some trouble breaking resistance at 61.5c. If we draw a trendline support from 9 Feb, we see the support at 59.5c today, it is quite clear that the uptrend is broken.

However, I would like to point out that volume was rather low and, in fact, it is true for other down days in the past few weeks. Volume has been generally lower on down days and higher on up days for AusGroup recently. This suggests that a longer term accumulation is underway and this is confirmed by the rising OBV in recent weeks. However, with the MFI turning down, I expect some weakness in the near term but I do not expect a crash in price.

If 58.5c gives way, the next supports are at 57.5c (50% Fibo) and 56.5c (38.2% Fibo).  If the price action moves above the trendline support once more, resistance remains at 61.5c.

CapitaMalls Asia: Inverted black hammer.

CapitaMalls Asia's volume expanded on a down day as the 50dMA was breached.  It closed at $2.26, forming an inverted black hammer in the process, which happens to be another possible reversal signal.

OBV has declined but the overall trend of accumulation is still intact.  MFI shows reduced buying momentum while the MACD has dipped below zero, signalling the end of positive momentum.  Having said this, the picture of a low volume pullback has not changed.

Drawing Fibo lines to determine where the supports are in case the price does continue to decline shows the next support levels at $2.25 and $2.23.  The low in February was established at $2.19 and should be a strong support if tested.  The downside is still pretty limited, therefore.

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The Chinese people love to shop. Grand Gateway Plaza in Shanghai:

Golden Agriculture: Partial divestment at 57.5c. (Rabobank's John Baker speaks.)

Golden Agriculture breached the resistance at 57.5c and closed at 58c, forming a nice bullish white candle in the process.  In my usual style, I partially divested at resistance on the way up and it's 57.5c in this case.  I have put in a sell queue at the next resistance of 60c, the previous high.

Although price action formed a white candle today, the slight reduction in volume creates a bit of unease, especially when volume expanded on the STI as the index tumbled almost 46 points to close at 2,887.46.

OBV continues to rise and MFI has turned up, indicating continuing accumulation and a return of positive buying momentum.  This is comforting.  MACD has touched the signal line and a bullish crossover seems imminent.

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Baker Says Palm Oil `Stands Out' Among Soft Commodities.
22 March 2010, Bloomberg.

A tale of two reversals and Saizen REIT.

In the last two sessions, I spoke of reversals for CapitaMalls Asia and Golden Agriculture and how their prices are likely to move higher.

CapitaMalls Asia disappoints today as its price closed at $2.29, supported by the 50dMA, forming a black hammer in the process.  A black hammer is actually another possible reversal signal.  The trading volume continues to decline which re-inforces the picture of a low volume pullback.  The MFI turned down, forming a lower high while the OBV is more or less flat.   All these suggest that the selling is half-hearted at best.

I continue to believe that buying at the current price has limited downside even though the buy signal on the MACD yesterday was negated today.

Golden Agriculture, on the other hand, put on a satisfying show of strength as it gapped up and closed at 57c, forming a bullish white candle in the process today.  Volume has also expanded with the rise in price, suggesting some sustainability.  The MACD's buy signal is confirmed as it moved upwards today, poised to do a bullish crossover with the signal line.  OBV continues to rise, signalling ongoing accumulation.

MFI, however, continues to decline, suggesting weak buying momentum.  We want to see the MFI turn up as that would signal a strengthening buying momentum.  Otherwise, any appreciation in price might turn out to be mediocre.

Saizen REIT has a new substantial shareholder, Credit Suisse Securities (Europe) Limited.  Credit Suisse Securities (Europe) Limited bought 2,149,000 units on 25 March 10, making it a substantial shareholder with 49,659,000 units or 5.2112 % of Saizen REIT.  Percentage of issue share capital computed based on unit capital of 952,927,055 units.  Saizen REIT closed unchanged at 16.5c today.  Longer term MAs are all rising and the longer term uptrend is intact.

CapitaMalls Asia: Reversal confirmed. (With comments on the US economy.)

Last Friday, I suggested that a reversal might be on hand as price action formed a white spinning top, with stalling selling pressure and continuing accumulation.

MFI turned up today and OBV is still rising as price action formed a white hammer.  Suggestion is for the price to continue rising with immediate resistance being provided by the 20dMA at $2.32.  Breaking this will see the recent high of $2.41 tested as resistance and I have an eventual target of $2.55 which should be the top of a longer basing process. The MACD has a buy signal today.

Buying at the current level has limited downside as it would be almost at the support provided by the 50dMA at $2.29.  Vested.

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Growth May Slow But "There's No New Recession Anywhere in Sight"

Posted Mar 26, 2010 01:51pm EDT by Peter Gorenstein



My sentiments are similar for 2010.  This guy makes sense.

And, as for a double-dip recession, Achuthan says it isn't in the cards. "There's no new recession anywhere in sight. In 2010, the business cycle remains your friend," he says with confidence.
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IMF foresees rapid US growth
AFP - Tuesday, March 30

WARSAW (AFP) - – The US economy looks set to return to relatively rapid growth soon, International Monetary Fund chief Dominique Strauss-Kahn said here on Monday. "The US economy, whilst it has been hard hit by the crisis, may recover rather rapidly," Strauss-Kahn said in a speech at the Warsaw School of Economics, during a visit to Poland.

"It's a flexible economy," noted Frenchman Strauss-Kahn, who is managing director of the Washington-based global lender.

"We'll see how rapid the recovery in the US economy can be. But I'm rather confident that the US economy will grow rather rapidly again quite soon," he added.

In January, the IMF raised its forecast for US growth this year to 2.7 percent from output in 2009, from its earlier 1.5-percent forecast. Strauss-Kahn did not say whether the IMF was set to revise its forecast upwards again.

Golden Agriculture: Reversal confirmed.

Last Friday, I suggested that Golden Agriculture spotted a Bullish Harami Cross pattern.  OBV showed a cessation of distribution and a reversal to accumulation.

Price action formed an inverted white hammer today with OBV continuing its rise and the MFI upturning, suggesting a return of buying momentum.  The MACD also spots a buy signal today.  The support at 54.5c is confirmed and is underpinned by the 50dMA.  Immediate resistance at 56c.  In the event that this is taken out, next resistance is at 57.5c.  This is followed by 60c, the recent high. 

The rising 100dMA is at 52c and the rising 200dMA is at 47c.  The longer term uptrend is intact.  In the immediate term, we want to see the price closing above 55c to rejoin the uptrending channel to resume the short term uptrend.  A close above 56c would be a firm signal that the short term uptrend is back in play. Vested.

A movie: How to train your dragon.

I know this has nothing to do with the stock market but we need to unwind and not think of the stock market all the time, right?

I am sharing this with all my readers:



Uber cool! I must watch this movie!

Golden Agriculture: Reversal signal?

Golden Agriculture was sold down yesterday due to negative news regarding Sinar Mas group:

Cargill wants Sinar Mas to address concerns over its agri practices. Cargill has threatened to drop Sinar Mas as a supplier if it fails to address general concerns over alleged illegal logging, a statement on its website said. Top European palm-oil buyers such as Unilever and Nestle have already stopped buying palm oil from Sinar Mas after Greenpeace released a report about forest clearing by Sinar Mas. A statement on the Cargill website said the firm had asked the secretariat of the Roundtable on Sustainable Palm Oil (RSPO) − an industry body of planters and green groups − to investigate the allegations made by Greenpeace "about illegal forest clearance and the Indonesian palm oil company, Sinar Mas.".....

There are two listed plantation companies listed under the Sinar Mas Group: Golden Agri and PT Smart. If Cargill pulls Sinar Mas from its supplier list, Golden Agri’s reputation in the palm-oil products market could be further dented. Furthermore, Cargill would become the third client to remove Sinar Mas from their supplier lists. To recap, Unilever and Nestle have stopped buying from the Sinar Mas Group since Dec 09 and Feb 10, respectively. Unilever accounted for 3% and Nestle for 0.2% of Golden Agri’s sales in 2009. Should Cargill follow suit, the impact could be more material at around 5% of its sales...

Read full report:
http://www.remisiers.org/research//GoldenAgri-260310[1].pdf

Golden Agriculture's price action today formed a doji, closing at 54.5c, seemingly recapturing this support level.  A doji formed after a long black candle in the previous session is a possible two stick reversal pattern which chart watchers call the Bullish Harami Cross pattern.

Although the MFI is down, suggesting a weakening buying momentum, the OBV has turned up suggesting that distribution has stopped for now and, indeed, reversed to see some accumulation.

We will need confirmation in the next session to see if the reversal signal is valid.  In the event of a reversal, the initial resistance is at 56c, a many times tested support turned resistance.  This is followed by 57.5c and 60c, the recent high.

CapitaMalls Asia: White spinning top.

A possible reversal signal is observed in CapitaMalls Asia's chart today: a white spinning top.  This has happened on the back of lower volumes as its price declined, suggesting a classic textbook case of a low volume pullback.  MFI has flattened while the OBV is still showing a gradual rise.  This suggests that the selling momentum has stalled and that accumulation is ongoing.

The 50dMA seems determined to act as the immediate support as its rate of decline slows.  The price action is caught between the 50dMA and the 20dMA which has flattened at $2.31.

Bollinger bands will squeeze as the volatility in price action falls.  The probability of an upward movement in price is higher than a downward movement in this instance.  The target of such an upward movement is the top of the base formation which is also where we find major resistance and that is at $2.55.

Saizen REIT: 1,627 lots bought up.

It is quite obvious that Saizen REIT is rangebound between 16c and 17c since late February.  The gradually rising MAs suggest that the longer term uptrend is intact.

Today, a single buy order at 3pm mopped up the entire sell queue at 16.5c. 1,627 lots bought up.  This caused the MFI and OBV to turn sharply up.  The MFI has been dipping in and out of the oversold region recently.  There is a lot of room for the index to move in the event of an upturn in price before it becomes overbought.

Is the high volume buy up today a one-off event or is it the beginning of more aggressive buy ups? Your guess is as good as mine. My purchase of Saizen REIT units is based on its compelling valuation and a potential upgrade by rating agencies.  I shall wait and see.

Golden Agriculture: Broke supports on higher volume.

Golden Agriculture broke all supports today on higher volume to touch a low of 53c before closing at 54c.  That the OBV and MFI both show obvious decline indicates heightened selling pressure.

The rising 100dMA is at 52c which happens to be the recent low as well.  This should provide some support in the event that the price continues to decline.  This is where I will queue to buy more but I will not break my piggy bank because if this breaks, the rising 200dMA is at 47c.  That is some way to fall.

Is this a whipsaw or the start of a downtrend? It is hard to say at this point in time but it is never wrong to be cautious especially when today's decline happened on the back of much increased volume.

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From Budi Wijana, Vice President Director, PT SMART Tbk, in response to the Indonesia Stock Exchange’s letter dated 18 March 2010:


"Nestle has recently announced that it has discontinued the Company as its supplier for Nestle’s manufacturing in Indonesia arising from a recent Greenpeace’s report based largely on earlier related allegations. We will continue our dialogue with Nestle and seek ways to verify the Greenpeace’s report.


"We would like to reiterate our commitment to the production of sustainable palm oil, our full compliance with the Indonesian Government rules and regulations, and our adherence to the Roundtable on Sustainable Palm Oil’s principles and criteria for sustainability.

"Sales to Nestle represented approximately 0.2% of the Company’s total sales in 2009. The outstanding contracts will be fulfilled by Nestle. Nestle’s decision will not have a material impact on the Company’s financial condition because the size of its purchases is not significant and our products have ready buyers and a strongly established and growing demand base in both the local and export markets."

http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_06519F0A59E673D3482576EB0038E4A9/$file/BEINestlePutuskanKontrakNo007190310EngFinal.pdf?openelement

Healthway Medical: Touched 16c.

A declining MFI shows weakening buying momentum but a flat OBV says that there is no distribution.  So, the overall picture is one where selling is being absorbed quite well.  This is all the more impressive when we realise that the volume is the highest in seven sessions.  However, the volume is still lower than ten sessions ago when price action hit a high of 18.5c.  Therefore, overall, the picture of a low volume pullback is still intact.

Forming a doji at 16c today is meaningful.  I have suggested that 16c is an important support as it is the midpoint of the recent high at 18.5c and the recent low of 13.5c.  If 16c holds up, we would have the formation of a higher low but if 16c breaks, Healthway Medical could see the formation of a double top.  I would keep an eye on 16c.  It is critical that it holds up.

Related post:
Healthway Medical: A beautiful symmetry again.

LMIR: Bought more at 48c.

LMIR's chart looks like it might be in the early stages of a symmetrical triangle.  Since late January, the price action has been trapped between 47.5c and 51c.  Stochastics has turned up and seems ready to emerge from the oversold region.

Using Fibo lines to determine where the supports are, we see clearly that 48c and 47.5c are important supports.  47.5c is the support to watch.  If it breaks, the symmetrical triangle is out the window and we have to see if the rising 200dMA holds up well as the new support then.

As the reason for buying more units in LMIR recently is to lock in a yield of 10% per annum, I am unfazed by any near term weakness in the counter's price.  In fact, I bought more at 48c.

CapitaMalls Asia and AusGroup.

CapitaMalls Asia: Price closed below the trendline support today at $2.29, after touching a low of $2.28 (the 38.2% Fibo line).  Technically, this is supported by the declining 50dMA.  The decline is on the back of low volume with the MFI and OBV more or less unchanged.  These signs suggest that a benign low volume pullback is taking place.  However, this does not mean that price would not continue to drift downwards.  If the $2.28 support is broken, the next support level is at $2.25 which would see me buying more.

AusGroup:  Nice up day with price closing at resistance provided by the 50dMA at 60c after hitting a high of 61.5c on the back of increased volume.  MFI and OBV have both turned up which suggest that buying momentum and accumulation are both moving up a notch. 

We have a buy signal on the MACD as well and it seems poised to cross above zero. Resistance is provided by the merged 100d and 200d MAs at 63c. Initial support is at 58.5c. A negative is the long wick on the white candle which suggests selling later on in the session today.  This adds a cautionary tone in an otherwise positive picture.

Charts in brief: 23 Mar 10.

Golden Agriculture: 56.5c, up 0.5c. The rising 20dMA has been doing a great job of supporting the price so far.  Buying at the initial support of 55.5c yesterday and a bid higher at 56c as a hedge, I am now waiting to buy more if the price corrects to 55c and 54.5c.  No satisfaction as yet.  Lower trading volume since the high formed on 10 March suggests that this is a low volume pullback.  Looking at the OBV, we do not see any obvious distribution.  Looking at the MFI, 50% appears to be functioning as a support.  The underlying support is intact.

Healthway Medical: A low volume black candle day as price closed unchanged at 16.5c.  MFI continues to decline and a lower low is a forgone conclusion, suggesting that the buying momentum is weakening yet again.  OBV has flattened and this suggests a temporary respite from distribution activities.  16c remains the support to watch.

CapitaMalls Asia:  $2.32.  I did a FA for this counter recently when a reader asked me about it.  This is the first time I am doing a TA for this counter as I think it is beginning to look interesting technically.  The counter is fundamentally strong and, technically, I see a fairly good entry price at $2.30.

Looking at the OBV, it is fairly obvious that distribution peaked on 11 Feb 10.  There has been a slow but gradual accumulation since then.  Despite a sharp decline in the MFI since 12 Mar 10, the OBV has been rising gradually.  This suggests that even as the buying momentum declines, the weakness is being seized to accumulate more shares here as weak holders sell out.

Price action went momentarily below the trendline support today which is almost where the 50dMA is at $2.30.  $2.30 is also the 50% Fibo support.  There is a good chance that the price will move higher from here as the 20dMA is rising and there is an uptrend channel since the price bottomed in February at $2.19.  The target of the next move up could be estimated by looking at the trendline resistance which I have drawn by connecting the two recent highs.  In time, we could expect the top of a larger base formation at $2.55 to be tested.

Downside seems limited.  In the event that the price moves lower, supports are at $2.28 and $2.25, the 38.2% and 23.6% Fibo lines.

Charts in brief: 22 Mar 10.

Healthway Medical: Decline continues as the MACD makes a bearish crossover with the signal line.  MFI's decline is accompanied by a decline in OBV.  This accentuates the bearish picture.  The 50dMA might be tested next at 16c.  Technically, 16c should be a support to watch.  Please see: Healthway Medical: A beautiful symmetry again.


Golden Agriculture: Price hits first support level at 55.5c today.  Even as the MACD makes a bearish crossover with the signal line, the MFI and OBV remain more or less unchanged.  The technicals suggest that there is weakness but no strong selling pressure.  I would continue to accumulate at supports as we might see 55c and 54.5c tested. Please see: Golden Agriculture: Approaching supports.

AIMS AMP Capital Industrial REIT: We have a buy signal on the MACD today as price rose 0.5c to close at 22c.  It remains to be seen if the flat 50dMA at 21.5c is resistance turned support.  Top of the base formation is at 23c.

Saizen REIT: A friend mentioned to me that it is very hard to get units of Saizen REIT at 16c these days.  Today, some lucky fellow queueing to buy at 16c got 3 lots.  Saizen REIT's daily MAs continue rising gently.  MFI is in the oversold region.  In the weekly chart, the Bollinger bands are beginning to squeeze and this bears watching.  Technically, the uptrend is intact and suggestion is that the picture might not remain placid for too long.

LMIR: Although the price stayed at and above the 49c support throughout the day, MFI and OBV declined sharply with the price moving down to 48.5c minutes before closing and then 48c in a post closing trade.  That the decline was on the back of increased volume suggests that the price might go on to test the previous low at 47c and the rising 200dMA 46c.  I would accumulate more then.  Please see: LMIR: Weakness is an opportunity.

Genting SP: Obvious downtrend.

Genting SP is in an obvious downtrend.  On 5 March, I said: "If the 50wMA (93.5c) is taken out in the next session, we might see the price rising to the 20dMA, which is descending sharply and should be at 97c then. All eyes would be on whether the price action would be able to break through the 20dMA to close higher, failing which, a resumption of the downtrend is more likely. I still see strong supports provided by the 100wMA (74c) and the 200wMA (70c) then."

Genting SP's price rose past the 20dMA and reached a high of 97.5c on 17 March, forming a white spinning top in the process.  The higher high formed on the MFI shows that buying momentum has strengthened recently.  However the OBV's rise does not mirror the steep fall weeks ago which suggests that the recent accumulation is weak.

On 15 Mar, I said:"This counter has been enjoying a revival lately but on decreasing volume. Daily volume has been lower with the price moving higher since 5 March, the day when price and volume spiked up. This suggests that the buyers are, probably, mostly shortists covering their positions. This is not to say that the price cannot move higher but without a significant number of new participants coming in on the long side, any move upwards would lack sustainability."  The negative divergence in price action and volume is still quite obvious and my earlier observations are still valid.

In the event that price does move up higher, immediate resistance is provided by the 200dMA at 99.5c.  Declining 50dMA is at $1.05.  Lady Luck could be quite generous on occasions.



Related post:
Genting SP: Stale bulls' second chance.
Charts in brief:15 Mar 10.

Charts in brief: 19 Mar 10.

AIMS AMP Capital Industrial REIT: This is more a buy because of the strong fundamentals but it's interesting to see how the price has not been able to move beyond 21.5c this week.  The price is basically being resisted by the flat 50dMA at 21.5c.  The rising 20dMA is currently at 21c and it looks like it is on course to do a golden cross with the 50dMA.  Nice. This might take another couple of weeks.  This counter is still basing and the top of the base formation is at 23c.

China Hongxing: A sell signal is seen on the MACD today, the first in almost two weeks.   The descending 20dMA nears 15c next week and this might pressure the price to move lower.  Please see: China Hongxing: Downside target?

FSL Trust: It had a nice run up recently but the price action has detached from the upper limits of the Bollinger bands. Is this a sign that price will correct downwards? If we observe how the price action has been affected by the rising 20dMA recently, we would notice that the 20dMA was pushing up the price, forming steps in the process. So, FSL Trust has been doing a correction using time instead of a correction in price. Could it continue its winning streak? The technicals point to the negative.

The MFI has been in decline in the last few sessions, suggesting that the buying momentum is fizzling out.  The MACD's rise is also less vigorous now and the distance with the signal line has narrowed, increasing the chances of a bearish crossover.  The 200dMA has also flattened, together with the 50d and 100d MAs.  Being trapped in a sideways trading range might a more probable near term development.  Support is seen at 60c thereabouts, the confluence of the 50d and 100d MAs.

Golden Agriculture:  MACD seems poised to make a bearish crossover with the signal line.  Price action formed a doji today, signalling indecision.  Someone said to me that the price refuses to fall to the supports I have identified.  Well, we could consider a hedge and buy a bid above initial support which means buying at 56c.  Hedging has always worked for me.  All MAs are still uptrending and I believe that buying at supports is still the way to go.

Healthway Medical:  Similarly here, the MACD seems poised to make a bearish crossover with the signal line.  Although the MFI has been forming lower highs and lower lows, the malaise has been accompanied by decreasing volume.  So, there is no heavy selling. 

Rising 20d and 50d MAs are at 16.5c and 16c respectively.  It remains to be seen if the price action will respond to these two MAs or will it respond more to the 100dMA like what happened in mid-February.  Remember that low volume does not mean that price cannot drift lower.  This is quite evident in the price decline which happened from 26 Jan to 12 Feb on declining volumes.  The 100dMA is currently at 14c.

Saizen REIT:  Saizen REIT closed unchanged at 16.5c, a price it has maintained for the last three sessions.  This is admirable if we notice how the counter has been subjected to some heavy selling which suggests that support is strong.  The uptrend, though gentle, is quite obvious.