Charts in brief: 24 May 2010.

STI gains 0.8% to 2,723.87 at closing
Monday, 24 May 2010

© 2010 - The Edge Singapore

FSL Trust: There is confirmation of the reversal signal. Price closed higher at 45.5c. There is a chance that the counter might move to test 50c but before that, expect resistance at 47.5c and 48.5c. MACD is closing the distance with the signal line.  MFI has emerged from the oversold region after forming a higher low. A rebound is underway.

SPH: A white candle formed but it's not a morning star set up. Volume was not impressive either.  It was a weak rebound. It remains to be seen if volume will expand meaningfully if price continues to move up. Initial resistance at $3.82 followed by $3.91.

Golden Agriculture: A bearish day as all the gains of the previous session was wiped out today. OBV continues to decline which indicates continuing distribution. Volume continues to decline as the price pulls back. As the downtrend is intact, I would wait for clearer signs of bottoming before adding to long positions.

LMIR: Reversal signal failed. Very bearish. OBV continues to decline, indicating continuing distribution. MACD continues to increase its distance from the signal line, pulling away downwards. This counter is still trying to find a bottom.

Tea with AK71: Movie going.

When I was a NSF years and years ago, a common activity in the evenings was to go to Yishun 10 and watch a movie.  In those days, we could buy a stored value card and it was only $5.50 per ticket, effectively.  Then, some criminally minded tech genius found out how to clone the cards and Golden Village stopped the sales of such cards. Pity.

If the camp was not so far away from my home in those days, I might not have gone to the movies so often.  I would have preferred to go home in the evenings, I guess. Since we had to go back to camp by 11.59pm at night, it just didn't make sense for me to make the long commute both ways.

I remember one evening, I went to the cinema and found that I had watched every single movie there was to watch at the time.  Yes, even those which I didn't think I would enjoy, I'd watched. That's how good a customer I was for Golden Village then.  During that time, I got used to watching movies on my own and actually enjoyed it.

I don't go to the movies as often nowadays.  If I do go to the movies, I would go with friends or family. However, I recently watched a movie alone.  That was IP MAN 2.  Watching a movie alone again brought back memories of my NS days. I might watch Shrek 3 alone too.

SPH: A bullish reversal signal.

Just like LMIR, SPH spots a bullish reversal signal.  In this case, it is a doji. Technically, it is less bullish than a white hammer but it might work.

The declining 20dMA will very likely form a dead cross with the 50dMA soon.  The 50dMA should cap any rebound in price at $3.91.  A lower high was formed earlier this month at $3.95 and this would be the next resistance level in case the 50dMA resistance is taken out.

MFI has been forming lower highs and dipped into oversold territory recently.  OBV has been in decline. The MACD is still declining in negative territory.  The bearish picture is obvious. There would probably be a lower entry price to go long on this counter. I would wait and see.

Related post:
SPH: Another black candle day.

LMIR: A rebound might be next.

LMIR is one of my favourite REITs. It has high yield, low gearing and a big discount to NAV.  However, its price has been in an obvious downtrend. The downtrend recently worsened.

FA is about value and TA is about price. Price wise, this counter might see more downside. Being pragmatic, I would add to my position when the next base is formed or when price rebounds and forms a higher low.

Looking at the daily chart, we see that on Friday, a white hammer was formed.  This is a nice bullish reversal signal. Drawing downtrend lines, we see that the steeper downtrend line coincides more or less with the declining 20dMA which formed a dead cross with the 200dMA in the last session.  This would be at 48c in the next session.  A rebound would probably find initial resistance at 48c.

I would wait to see if a lower high is formed before deciding whether to add to my position.  The MACD is still pulling away downwards from the signal line and the OBV is in decline.  MFI is in the oversold region and this also supports the idea of a near term rebound but it has been forming lower highs.  So, if another lower high is formed during the rebound, the bearish picture is reinforced.

Related post:
LMIR: 1Q 2010 results.

Saizen REIT: Recent insider purchases.

17 May 2010:

Ms. Yvonne Ho Yuk Yee, spouse of Mr. Raymond Wong Kin Jeon, has purchased 186,000 Units on the open market. Mr. Wong is therefore also deemed to be interested in the 186,000 Units owned by Ms. Yvonne Ho Yuk Yee and held by HSBC as depository agent.  

Amount of consideration (excluding brokerage and stamp duties) per share paid or received: 16.5c.

19 May 2010:

Ms. Yvonne Ho Yuk Yee, spouse of Mr. Raymond Wong Kin Jeon, has purchased 300,000 Units on the open market. Mr. Wong is therefore also deemed to be interested in the 300,000 Units owned by Ms. Yvonne Ho Yuk Yee and held by HSBC as depository agent. 

Amount of consideration (excluding brokerage and stamp duties) per share paid or received: 16.5c.

Mr. Raymond Wong Kin Jeon's deemed interest now stands at 19,073,390  Units or 2.001% of current issued share capital. See announcements here.

This is one thing which helps to convince me that Saizen REIT's fundamentals are sound. Logically, if it is a basket case, insiders would not be buying.

Some people tell me that I should have sold my Saizen REIT units at 17.5c and buy again when it is lower to make more money.  Hindsight is beautiful, isn't it? Well, I could have but my investment in Saizen REIT is not for trading.  Even at 17.5c, I consider it a bargain.  Why would I sell?  Of course, this is informed by FA.

As always, how I treat each investment depends on my motivation for being invested in the first place as well as the prevailing circumstances.  The reasons for investing in Saizen REIT are still valid.  Circumstances have not soured in the present.  If anything, the REIT's fundamentals have improved and are likely to improve further. So, I am staying vested.

Related post:
Saizen REIT: 3Q FY2010 results.

Saizen REIT: Bought more at 16c.

Saizen REIT touched a low of 15.5c today.  As my investment in Saizen REIT is for the long term, I took a look at the weekly chart for clues.

The rising 50wMA is at 15.3c and should be at 15.5c next week. That there is buying interest in this REIT is seen in the higher high formed in the MFI and the upmove in the OBV.  The declining 100wMA should be at 16.5c next week.

Price could remain trapped between the support provided by the 50wMA and the resistance provided by the 100wMA in the near future without affecting the uptrend.

The Bollinger bands are narrowing. A couple of golden crosses seem to be in the works. An impending positive move in price is not an unreasonable expectation and is consistent with the REIT's improving fundamentals. Today, I bought more at 16c.

AIMS AMP Capital Industrial REIT: 20.5c.

Bought more units of AIMS AMP Capital Industrial REIT today at 20.5c.  It has been rangebound between 20.5c to 23c for months now.  So, buying at 20.5c, the support of the trading range seems fairly safe. 

However, the technicals suggest further weakness.  The MACD has plunged further into negative territory as price formed a gravestone doji. MFI has dipped into the oversold region after forming lower highs. OBV is declining slightly. Further weakness could see 19.5c tested, the low in Dec 09.

A quick look at the weekly chart shows a range from 20c to 23c as suggested by the Bollinger bands. So, although further weakness cannot be discounted, the downside seems limited.

Do not fear the selldown.

It is safe to say that there is a lot of fear in the air. Palpable? Almost. What are we to do? Well, I am sure everyone has his or her own opinion as to the best strategy in such a situation.  Maybe, I shouldn't be so sure. So, what do I think? Well, I have been sharing my thoughts in this blog and what I now think is largely the same as before.

For a stock which is clearly in a downtrend, sell into strength at resistance.  It might be a lower high but it is still a high.  We don't want to sell at a low.  Then, wait patiently for it to form a base or to rebound and form a higher low.  It would be safer to take up a long position then.

Not all stocks are in a downtrend.  For stocks of businesses with strong fundamentals with their uptrends still intact, buying at supports is still the way to go. Look to the technicals for possible negative divergence as a warning sign.  Certain stocks might be rangebound and if the businesses have strong fundamentals, buying at the support of the trading range is what I would do.

Generally, our motivations for being in the stock market would determine the strategy that we adopt.  For me, I am primarily in the stock market to secure a passive income stream.  So, I would accumulate stocks with strong fundamentals which provide high yields. Examples are AIMS AMP Capital Industrial REIT, LMIR, Saizen REIT and SPH.

I also invest in growth stocks but these are generally not known for big dividend payouts and I invest in these with a view to trade.  Examples are Golden Agriculure and Healthway Medical.  Recently, I tried my hands at CapitaMalls Asia and lost some money, if you remember.

Do I think we are having a meltdown? Are we going into another recession or even a depression? I don't think so. Informed by Jim Rogers and Marc Faber, I have talked about the next crisis being a currency crisis and we are seeing the precursors of that crisis.  For now, I believe that the stock market will be going higher in time. Fiat currencies are not going to do a disappearing act.  Governments around the world will not allow a collapse.  So, in crises, we find opportunities.

There would be some people who want to sell away all their shares now, fearing a meltdown, keep their cash and wait.  There would also be those who are keeping all their shares, believing them to be good investments, and would be buying more shares at lower prices to average down.  In both instances, I would say, look to the technicals as we want to avoid selling at the lows or buying at resistance. We should not be afraid but we should stay cautious. Good luck to us all.

Related posts:
What are investors to do in downtrend?
A correction? An opportunity.

STI: Falling through the 200dMA.

My last post on the STI scared quite a few people, I imagine. Well, the STI has closed below the 200dMA on relatively high volume.  Failing to recapture the 200dMA support is bearish, of course.

STI decreases 0.8% to 2,753.51 at closing
Thursday, 20 May 2010

© 2010 - The Edge Singapore

The MACD continues to pull away downwards from the signal line, increasing the distance with the signal line when it looked as if it was just closing the distance in the last few sessions. The sell signal in the last session was confirmed.

The MFI continues forming lower highs and being some distance from oversold, it could continue moving downwards with little trouble.  The OBV is steadily declining. The 20dMA seems set to form a dead cross with the 100dMA in due course.

The low achieved today at 2,735 just touched the uptrend line before bouncing to close somewhat higher at 2,753.  Will the trendline support hold up tomorrow?

Looking at the weekly chart, we find the next support provided by the 50wMA at 2,720 points. The previous low was at 2,660 points. To keep a semblance of an uptrend, the next low formed by the STI should be higher than 2,660 points. Well, there is one day left to the week.  How the STI behaves tomorrow could very well determine the tone of the market next week.

Incidentally, the declining 100wMA is no longer at 2,425 points.  It is now at 2,400 points. A declining MA is not a very strong support.  That's for sure.

Related post:
STI at 2425 points?

Golden Agriculture: Testing 200dMA support.

I sold half of my remaining position at 55.5c resistance on 10 May and hoped that the upward momentum could be sustained to hit 58c where I would sell my remaining shares but that did not happen.

Today, its price broke the 200dMA briefly to touch a low of 50.5c but closed at 52c.  This might be due to a little bounce in CPO's price today to close at RM2,470, up RM35 or 1.44%.  Clearly, the downtrends for both Golden Agriculture and CPO are intact.

If the price closes below the 200dMA, the near term supports are at 48c and 46c as suggested by the candlesticks.

Related post:
Golden Agriculture: An inverted cross.

FSL Trust: That sinking feeling.

FSL Trust's price is being battered for losing a big part of a 15% income from a long term charter.  If we think about it, proportionally, its unit price should not lose more than 15% as well. However, from a price of about 60c just before the news was made known, it has plunged to close at 44.5c today. At one point, it reached a low of 42.5c today.

MFI is in oversold territory.  OBV is still declining. However, the price decline in the last 13 sessions show clearly a pattern of low volume pullback.  The fundamentals notwithstanding, I sense an opportunity.  I would be very tempted to buy some at the 138.2% Fibo line which approximates 41.5c.  If the price should go as low as the 150% Fibo line which approximates 39c, I would probably get some.

Related post:
FSL Trust: A sinking ship?

Healthway Medical: Price levels to consider.

Selling most of my remaining shares in Healthway Medical at 15.5c resistance on 11 May instead of waiting to collect the 0.12c dividend turned out very well. Heatlhway Medical closed lower at 14c today. This is the support provided by the rising 200dMA which seems in danger of breaking as more than 20m shares were sold down at 14c today.

The MACD is still falling in negative territory.  MFI has been forming lower highs and OBV has been declining.  The technicals suggest continuing weakness. 

If the 200dMA is compromised, the longer term uptrend is in danger.  The previous bottom was at 13.5c.  This should provide some support.  If that gives, the candlestick resistance at 12.5c should become support.  12.5c was the resistance in a trading range which lasted for months and frustrated many. Price finally broke out of that trading range in the new year.  So, to me, 12.5c should be a strong support.  However, if price should fall back into that range, the support in the trading range is at 11c.

Many people remember the round number 10 and it was at 10c that I first started buying shares of Healthway Medical in mid 2009.  Will the price of Healthway Medical reach 10c again sometime this year? Personally, I rather doubt it but one never knows.  We can only wait and see.

Good luck to all who are still vested and good luck to those who would like to accumulate at lower prices.  Obviously, I am sitting on the fence.

Related posts:
Healthway Medical: A weak first quarter.
Charts in brief: 11 May 10.
Charts in brief: 10 May 10.

Charts in brief: 19 May 10.

The STI declined to test and break 2,780 today. We will have to see if it bounces back to close above 2,780 tomorrow or if it would continue its downward path.  If it continues to decline, there is potentially much room to fall.  I am still staying cautious and waiting to see some signs of a stronger support holding before adding to my positions.

STI declines 2.5% to 2,774.54 at closing
Wednesday, 19 May 2010

© 2010 - The Edge Singapore

CapitaMalls Asia: Closing at $2.10 after gapping down today confirmed a lower high for this counter.  The downtrend is intact.  I am 100% divested. See how the volume expanded on a down day? Sell signal seen on the MACD. MFI and OBV have both turned down. More likely than not, this counter is continuing its downtrend.

SPH: Price continues moving downwards towards the 200dMA at $3.70.  If tested, will it hold? We can only wait and see.

Given the current bearish atmosphere in the global stock markets, it pays to take a longer term view in our investments.  To this end, take a look at the weekly charts.  A stronger support for SPH is actually at $3.60, where we find the rising 50wMA.

LMIR: 47c support has been taken out.  With price closing at 45c today, I drew Fibo lines to find the next supports.  It appears that 44c is only a minor support as suggested by candlesticks.  If the decline continues, next major support is at 42c. As seen in the weekly chart drawn yesterday, 41c is support provided by the 100wMA but as this MA is still declining, if conditions are bearish enough, we might see 40c tested.

I am staying sidelined and will wait for the dust to settle.

Related post:
Charts in brief: 18 May 10.

Charts in brief: 18 May 10.

Nice little up day for the STI. I am staying defensive and waiting to see if the support at 2,780 holds. Global stock markets' almost relentless climb upwards is experiencing a few much overdue stumbles and falls. Before the markets go higher, they could go lower.

Earnings upcycle not enough to lift STI, says CIMB
Tuesday, 18 May 2010

© 2010 - The Edge Singapore

CapitaMalls Asia: Another up day as price closed at $2.16.  MACD continues rising in negative territory.  MFI is rising towards 50%.  OBV is rising.  However, the negative divergence between volume and price movement is glaring.  As price rises, volume decreases.  The volume should ideally increase in order to have a sustainable move up in price.

$2.19, the bottom of the base formation in February is likely to be a strong resistance. If we use the exponential 50dMA, we see something very interesting. It is at $2.19.

The Exponential MA, or EMA for short, has more weight given to more recent data. This is useful when we want to gain some insight into shorter term psyche of market participants as more recent price movements are fresher in their collective memories. Will CapitaMalls Asia test $2.19? That, I do not know but I know I would be 100% divested if it does as the technicals favour further weakness.  I believe that short sellers would find $2.19 almost irresistable.

SPH: On Monday, it closed for first time in a long time below the 100dMA. Today, the attempt to recapture the 100dMA support failed. I would wait to see if the 200dMA is tested and if it holds in such an instance. The 200dMA is currently at $3.70.  If the 200dMA holds, I might buy some.

LMIR: I am taking a longer term view with this counter. I continue to like its high yield and low gearing. In the shorter term, there is no question that it is bearish even though the weakness is on relatively low volume. I am looking at its weekly chart to gain insights into its longer term technicals.

It would seem that 47c is an important support provided by candlesticks and the rising 50wMA. OBV is more or less static which, to me, suggests that most unit holders are long term investors. The MFI has been forming lower highs and is currently at 50% which could act as support. Would I buy at 47c? As a hedge, perhaps.  I won't throw in the kitchen sink because the lower highs in price since 11 January this year give me a feeling of unease. 44c, anyone?

Saizen REIT: The recent report by Saizen REIT's manager seems to have reassured investors and although we are not seeing any enthusiastic buying up, we are not seeing any desperate selling either. Fundamentally, there is increasing recognition that this REIT is heavily undervalued.

I mentioned before that the descending 100wMA is exerting some downward force on the price of this REIT and it was at 17c last week.  This week, it is lower and approaching 16.5c.  If we look at the weekly chart, we see that the resistance provided by the100wMA has been challenged.  This happened yesterday. 

The rising 20dMA and 50dMA should inevitably form golden crosses with the descending 100wMA. Fibo line projections show 150% at 20.5c and 161.8% at 21c.  These would be my immediate targets in a breakout scenario.

Related posts:
SPH: Another black candle day.
LMIR: 1Q 2010 results.
Saizen REIT: 3Q FY2010 results.

Tea with AK71: Life.

I like the Bukit Merah and Telok Blangah area for all the gigantic trees.  They provide shade and soften the surroundings of the neighbourhoods with all their concrete structures.  These trees must be very old.  One of them fell today across several lanes in Jalan Bukit Merah just across from Jalan Membina and obstructed traffic in both directions, crushing a van in the process.  Traffic came to a standstill.

More than ten SBS buses lined up on the extreme left lane as they could not move on. Hundreds of passengers must have been affected. Cars had to back up, reversing all the way to the T-junction with Kim Tian Road.  Alternative routes were jammed up as well as it was the morning rush hour.  Imagine the chaos and I was caught in it!

As this took place close to my home, I turned back and came home, calling the office to take a day's leave from work. A frightening thought came to mind that it could have been me. What if the tree had fallen on my car and crushed me in the process?  Scary thought.  Life is so very fragile.

At home, I drew the curtains which I rarely do and let in the sunlight. I did some gardening, something I've not done for a while. I washed the balcony and cleaned the French windows. I boiled some barley water for my very bad throat and put some dirty laundry to wash, using a new washing powder my mom got for me which supposedly allows indoor drying without any odour.  I might go see a doctor for my throat later too.

All these generated a thought: I used to always fight for what is right and what should be. As I age, I understand more and more that, sometimes, it is futile to fight especially if the situation is beyond our control. Life can be uncomplicated which can only be a good thing.

OK, the washing machine is beeping which means the laundry is done. Have a good day, everyone!

STI at 2,425 points?

What we have is a sea of red.  Sentiments have not been so bearish in a long time as the HSI sank below 20,000 points.  I continue to believe that any rebound that comes along in the near future should be an opportunity to reduce exposure in the stock market. This is more so for stocks which are clearly in a downtrend. Having said that, the STI is holding up rather well under all the selling pressure.

As the index retreats, the OBV declines. This is an obvious sign of distribution. The MFI has been forming lower highs and lower lows.  Positive buying momentum is lacking.  In the near term, the 2,780 level or so should be an important support.  This is confirmed by Fibo lines, the rising 200dMA as well as candlesticks.

Looking at weekly charts is sometimes very revealing. If we look at STI's weekly chart, we understand why it is more resilient than some other indices. We understand why the 2,780 level is an important support. 2,780 is also where we find the uptrend line and the flat 200wMA. If the longer term uptrend is to stay intact, 2,780 must not break. Will it break?  I cannot say for sure, of course, but the technicals are rather weak.

1. Volume has been rising as the index retreated in the past few weeks.

2. The high achieved in the week of 12 April was accompanied by a lower high on the OBV compared to the high achieved in the week of 4 January, telling us that there was less accumulation taking place in April. Similarly, the MFI was lacklustre on 12 April compared to where it was on 4 January.

Not all weekly MAs are uptrending.  The 100wMA is still declining and is currently at 2,425. The chances of the STI retreating further exist.  Much depends on whether 2,780 holds up. Could we see the STI at 2,425 in the coming weeks? Perhaps.

Healthway Medical: A weak first quarter.

Earlier this year on 24 Feb, I said that Healthway Medical's share price did not provide value for money anymore. By then, I was 80% divested. Primarily, I was concerned about the heavy dilution which took place due to the rights issue and a following share placement which increased the number of shares from 1.384b shares to 1.841b shares.  I explained that I would not buy more Healthway Medical's shares unless I feel it provides value for money once more.

Even earlier on 16 Jan, I explained the rationale for partial divestment based purely on technical analysis. Healthway Medical's share price gained almost 40% in a matter of days.  "The fundamentals and prospects are still good over the longer term. I just feel that the market became a little too enthusiastic and sent prices up too high and too quickly. I liken it to a sprinter who is able to run very quickly over short distances but the speed is unsustainable over longer distances."

Thus, in the recent months, informed by a combination of TA and FA, I sold down my stake in Healthway Medical and at the moment, I am almost 100% divested, retaining only the rights shares and shares from the scrip dividend exercises.

Technically, now, Healthway Medical is testing resistance at 15.5c after it went CD. Fundamentally, I am still waiting to see if Healthway Medical could utilise the funds raised from its rights issue and share placements well enough to increase earnings at least proportionally to restore EPS to pre-dilution levels. With this in mind, I looked at the 1Q 2010 report released on 14 May.

Compared to the same period last year:
1. Revenue reduced 6.3%.
2. Staff cost increased 20.1%.
3. Profit before income tax reduced 68.5% to S$1.409m.
4. Total liabilities remain more or less the same.
5. Cash and cash equivalents increased from $28.4m to $39.4m.
6. Cash flow from operations became a negative $4.946m compared to a positive $3.974m.
7. Due to its rights issue, cash flow from financing activities is a positive $19.2m.
8. EPS is 0.09c, down from 0.28c.

I would draw attention to points 3, 6 and 8 in bold. The results are disappointing. Given the increase in the number of shares by 33% or so, in the short term, I was expecting the EPS to reduce proportionally by 25% or so.  EPS has instead reduced by 70%!

To be fair, Healthway Medical is going through an expansionary phase and would have more costs and greater expenses. As an investor, to be prudent, I would continue to wait for greater clarity on whether higher earnings would follow, maintaining that the share price at current level does not offer good value.

The technicals suggest that the longer term uptrend is still intact and the rising 200dMA should provide initial support at 14c. The declining 20dMA has formed a dead cross with the rising 100dMA.  Two gravestone dojis were formed in succession in the last two trading days. MFI is flat and OBV has been declining. Ominous signs.  The only consolation I see is the reducing volume as price declined.

There is also a possibility that a double top was formed by the highs in January and March respectively. If the pattern is valid, there is a long way to fall.

Related posts:
Healthway Medical: An updated valuation.
Rationale for partial divestment.

Golden Agriculture: An inverted cross.

A doji that looks like an inverted cross. Not good.  Well, it's not because it invites the devil in but it suggests that price tried to push higher but ended up in failure at the end of the day.

Fundamentally, CPO price declined again today and, thus, continues the downtrend. This is probably one reason why Golden Agriculture's share price is lacklustre.

MFI has formed a slightly higher high. It remains to be seen if it would form a higher low. MACD and OBV are both flat. Volume is much lower.  All these suggest a lack of interest from market participants.  If this continues, chances are greater that the price would drift slowly lower.

55.5c remains the resistance level to watch for now. This was the price at which I divested some of my remaining investment in the company recently on 10 May, observing that the uptrend has been compromised.

SPH: Another black candle day.

After doing a partial divestment of my investment in this company at $3.95 on 10 May, the price has been closing lower. This is the 4th black candle day in a row. I was hoping that price would move higher to test the next higher resistance so that I could divest more of my investment. No such luck.

MACD is moving deeper into negative territory. MFI formed a lower high on 10 May and has continued declining since, suggesting declining positive buying momentum. OBV is more or less flat.

On a positive note, the volume has been rather low in the last four sessions which means an absence of heavy selling.  If price does move higher towards the declining 20dMA at $4.00, I would very likely sell more.  If it moves to retest the recent low, I would wait to see if a higher or lower low is formed before deciding on a course of action.

CapitaMalls Asia: Another up day.

CapitaMalls Asia staged another up day on similar volume as the prior session.  I queued overnight to reduce exposure further at $2.12, not confident that this level would be taken out.  I also queued to sell at $2.17, two bids below the next resistance which was identified at $2.19, if $2.12 should be taken out.  Of course, both sell orders were done. I have a small position left. 

What will I do next? If the price moves higher to test the higher resistance level at $2.23, I would exit totally. If it does not and shows signs of a slide back downwards, I would also exit totally as it might go on to retest the recent low. The recent increase in price on rather low volumes lacks conviction and does not bode well for long only investors. I would watch out for the counter to form a base, lacking which, it should form a higher low, before I consider going long again.

This is the second counter I have cut loss on this year after China Hongxing.  In a way, it is good to lose some money after a long winning streak as it reminds me that I am human and that I make mistakes too.  Must not become overly confident which might really sink me one day.

I read somewhere that it is normal to give back some of our gains to the market when the trend turns.  The person being interviewed said to give back 25% of our gains is acceptable. Personally, I think that is too much. ;-p

Courage Marine: 1Q 2010 results.

Courage Marine presented its 1Q 2010 results today with the BDI at an auspicious number, 3,888! A happy coincidence! 

Quarter on quarter, operationally, its revenue improved 12.9% and gross profit margin improved from 19.1% to 27.8%.  Its balance sheet remains very strong as it retains a nett cash position.  Cash flow from operations in 1Q 2010 was US$5.3m.

Technically, Courage Marine's chart looks weak.  However, there is no obvious selling down of the stock.  This is confirmed by the OBV which is flat. MFI is in the oversold region and price is currently below all the daily MAs.  If the price action does not recapture supports, the malaise could continue and price could drift lower.

I have a list of companies and REITs which I would like to buy on any near term weakness in the next few months. Courage Marine is one of them.

Read press release here.

Related post:
Courage Marine: Riding the waves of recovery.

Charts in brief: 13 May 10.

CapitaMalls Asia:  MFI continues to rise from the oversold region.  MACD turned up towards the signal line. OBV has turned up. Things are looking up, it seems.  Then, we see the white candle with a long wick on top.  This is a weak white candle. Volume has expanded but not significantly so on an up day.

$2.12 remains a strong resistance as market participants remember this as the support that failed not so long ago on 4 May.  The descending 20dMA is, coincidentally, at $2.12 as well which adds to the downward pressure. 

I queued overnight to reduce exposure at 2 bids below resistance at $2.10, cutting losses in the process.  I am not confident that $2.12 could be taken out but if it does get taken out, the next resistance is at $2.19, the bottom of the base formation earlier in February.

Golden Agriculture: CPO's price declined again today, continuing its downtrend. For Golden Agriculture, it is quite obvious that 55.5c continues to be a formidable resistance. That the decline has halted is evident as the MACD has flattened. The OBV has flattened too.  Price seems to be moving sideways within a range for now. 53c to 55.5c is my observation.  The near term downtrend is still intact.

Hyflux Water Trust achieves DPU of 1.16 cents for 1Q
Thursday, 13 May 2010

© 2010 - The Edge Singapore

Related post:
Charts in brief: 12 May 10.

LMIR: 1Q 2010 results.

For me, the important numbers are the following:

1. LMIR is trading at a huge 43% discount to NAV 84c.
2. Gearing is very low at 10%.
3. Annualised yield is 10% at the unit price of 48c.

Despite the very strong fundamentals, LMIR's unit price has been languishing.

Technically weak, it has closed below the 200dMA support today after forming lower highs since the start of the year. The next support is at 47c. If this breaks, price could fall to as low as 44c, I reckon.

MFI has been forming lower highs, suggesting a lack of positive buying momentum, making a further weakening in price for this REIT probable. So? I would definitely accumulate on weakness if it does come to that. 44c would be a bargain!

See presentation slides here.

Related post:
LMIR: More units at 10% yield.

AIMS AMP Capital Industrial REIT: Results.

A nice set of numbers and within expectations.  A dpu of 0.5376c will be paid out on 28 June. Annualised dpu of 2.1504c or an annualised yield of 10% based on a unit price of 21.5c.  Low gearing of 28.9% and a NAV of 31c make this REIT a very attractive proposition for anyone seeking reliable high yields as a source of passive income.

Technically, there seems to be some underlying support for this REIT.  MFI and OBV are both uptrending, although choppy. The MAs are uptrending too. 23c remains the resistance to watch and support has been established at 20.5c.  I would very much like to accumulate more units of this REIT.

See presentation slides here.

Related post:
High Yield Portfolio.

Charts in brief: 12 May 10.

Courage Marine: BDI is up 3.1% at 3,822 today. Looking good for dry bulk shipping. Very low volume today with price at 19.5c. MFI remains in the oversold region. OBV is flat. Investors are not taking up big positions either way. Waiting for the quarterly results? Maybe.

CapitaMalls Asia: Price is detaching from the lower limits of the Bollinger bands. Although momentum has turned up, the volume is low. Let us see if immediate resistance could be taken out and if $2.12 would be tested. I would definitely reduce exposure then.

SPH: The technical weakness is obvious. Volume has been declining as price rebounded from a low of $3.76 four sessions ago. MFI has been forming lower highs. I would wait to accumulate on further weakness.  If price falls closer to $3.70, I would be tempted.

Related post:
Charts in brief: 11 May 10.

Golden Agriculture: Net profit rose 932%.

Chu Yeow commented during lunchtime that Golden Agriculture "turned in quite a good quarter". It was an understatement, I found out. The impressive set of numbers resulted in a white candle day for the counter. What we have looks like a bullish harami and, if valid, will see 55.5c resistance taken out.  The technicals do suggest that the rate of descent has slowed. If 55.5c is taken out, the next resistance level would be 58c.

"Golden Agri-Resources says net profit attributable to shareholders rose 932% to US$89 million ($122.9 million) in the first quarter 2010 (1Q 2010) from US$9 million in (1Q 2009) despite low seasonal production....

".........The planter’s financial position as at end of March 2010 remained at a healthy level with conservative gearing and sufficient cash balance. Total assets maintained at US$7.83 billion while total liabilities were recorded at US$2.21 billion."


Read full article:

Golden Agri-Resources’ 1Q net profit surges 932% to $123m
Wednesday, 12 May 2010

© 2010 - The Edge Singapore

 
Related post:
Three portfolios and three counters: Future gains and passive income.

Gold is higher once more.

Gold hits record high in Asian trade
Posted: 12 May 2010 1113 hrs

HONG KONG : Gold opened at a record high of 1,228.00-1,229.00 US dollars an ounce in Hong Kong on Wednesday, as investors sought a safe-haven over deepening concerns about the eurozone debt crisis.

The precious metal closed in Asia on Tuesday at 1,208.00-1,209.00 dollars but later climbed as high as 1,224.82 dollars an ounce in European trade.

Analysts said the commodity was likely to maintain its safe haven role while other markets remained vulnerable.

The previous record for the metal was set on December 3 last year when it reached 1,226.56 dollars.

"The response of the central banks and the IMF to the southern European mess is almost guaranteed to ensure continued volatility in world markets," said Capital Spreads analyst Simon Denham.

Investors had on Monday welcomed the European Union and International Monetary Fund aid package worth 750 billion euros (one trillion dollars) to resolve the debt and budget deficit crisis in Europe.

However, the euphoria faded on Tuesday amid resurgent doubts over countries' ability to reduce their deficits.

Read complete article here.

Gold Surges: Time to Climb on Board or Is the Party Just About Over?
Posted May 12, 2010 03:06pm EDT by Heesun Wee



Related post:
Gold at US$1,210 an ounce.

Saizen REIT: 3Q FY2010 Results.

A good set of numbers overall for Saizen REIT.  The only thorn in its side remains the CMBS for YK Shintoku which it defaulted on late last year.

Key points for me:

1. Saizen REIT's properties are all Freehold and not Leasehold.  So, there is no "depreciation" which some investors might be concerned about.

2. Occupancy rates have been consistently above 90% even through the financial crisis which reinforces the idea that demand is relatively inelastic for Saizen REIT's properties.

3. Average rental rates have stayed consistently above JPY1,500 psm.

4. If YK Shintoku were to suffer foreclosure, the nett effects would be a 22% decrease in nett property income, a 10% reduction in NAV and its gearing level would decline from the current 36.9% to 27.4%. 

A 22% decrease in nett property income would probably mean a similar reduction in dpu from my projection here. Based on the current number of units in issue, the dpu would reduce from 2c to 1.56c giving us a yield of 9.45%.  The NAV would reduce from 39c to 35c approximately.  With the proforma foreclosure gearing at 27.4%, Saizen REIT would emerge unscathed and, in my opinion, stronger in its balance sheets. So, if YK Shintoku goes through a foreclosure, Saizen REIT remains a great investment as it has high yield, a big discount to NAV and low gearing.

The CMBS lenders for YK Shintoku, as expected, are dragging their feet and still "formulating course of action".  Why would they want to go ahead with foreclosure when they are receiving 7.07% interest payment now? They are lenders, not property managers or investors, after all.

YK Shintoku's property income is more than sufficient to cover the punitive interest payment due to the default.  So, it is still more positive than negative to keep the status quo.

Presentation slides here.

Saizen REIT to resume FY10 distribution to unitholders in Sept
Wednesday, 12 May 2010

© 2010 - The Edge Singapore

SAIZEN REIT:
Out of woods and resuming cash distribution
Written by Sim Kih, Thursday, 13 May 2010.
Read the article in NEXT INSIGHT here.

Related post:
Saizen REIT: March 2010 presentation.