First REIT: Breaking resistance.

To any chartist, it is clear that First REIT broke an important resistance at 74.5c in the last session. Volume expanded significantly on a day when a wickless white candle was formed.

With the MACD rising into positive territory and with the RSI rising from the borders of its oversold territory, we could be seeing the beginnings of an earnest attempt to move higher in price. We could see stronger resistance starting from 76c with 77c being a significant many times tested resistance which also approximates the 150% and 161.8% Fibo lines at 76.8c and 77.2c respectively.

Looking at the weekly chart, we see the rising 100wMA approximating the upper Bollinger band at 78c. Possible target? Why not? Declining 50wMA is at 82c. Possible target? Again, why not? However, this is the weekly chart. So, it gives us insights into the longer term picture. If price were to climb higher, it is going to do so on a wall of worries.

Related post:
First REIT: 1Q 2011 results.

Cache Logistics Trust: Weekly chart.

For quite a while now, I have been investing for income. However, friends and readers of my blogs in the early days would know that I am not averse to investing for capital gains as well. Logically, who would be averse to investing for capital gains?

For a longer term picture, I like to look at weekly charts. Looking at the weekly chart of Cache Logistics Trust, it is obvious that it has been in a downtrend for months, well, since mid September 2010. I feel that a rebound is probably on the cards, if not a reversal. Why? The MACD has formed a double bottom and the distance with the declining signal line has narrowed. We could see a bullish crossover in time although it would almost certainly happen in negative territory.

Next, look at the OBV. Since forming a low in the week of 21 February, it has not formed a lower low and this is although price went on to touch new lows. This suggests that smart money is accumulating units in this REIT as price weakened in the longer term.

In terms of candlesticks, a white hammer was formed last week. This is following the preceding week's big black candle. This is a bullish signal which, of course, needs confirmation. If confirmed, immediate resistance are at 95.5c (20wMA) and 96.5c (50wMA). Overcoming these resistance levels would give a target of 98.5c which is resistance currently provided by the trendline resistance which approximates the upper Bollinger band.

With the next income distribution due to be announced on 26 April, chances of an upward movement in unit price is rather good. I have been accumulating and wish fellow unitholders the best of luck.

Related post:
Cache Logistics Trust: Testing supports.

Tea with AK71: Dishonest merchant.

More than three years ago, I was given a present, a Canon IXUS 860 IS digital camera, in Hong Kong. It was, at the time, a somewhat expensive item.

Recently, the rechargeable battery was not holding its charge and even someone who is not savvy with high tech stuff like me knew that the battery probably had to be replaced. This is what the battery looks like:

When I showed the battery to a very good friend of mine, he told me that the battery is not a Canon original. I told him it came with the camera and it must be original. Well, my friend who is more tech savvy than I am told me firmly that he has quite a few Canon digital cameras and what I showed him was definitely not the real deal. Oh yes, I forgot to mention that this friend is also very rich.

Anyway, I was somewhat upset that my present, although given to me three years ago, probably suffered some monkey business at the hands of some dishonest merchant in Hong Kong!

As you can see from the photo above, the original from Canon, which I bought from Canon's showroom at Vivo City recently looks quite different from the battery that came with my camera. Price: S$89.00.

Dishonest merchants are everywhere. I ought to warn my friend in Hong Kong who bought this camera for me not to buy anything from that shop again, wherever they are.

Saizen REIT: A new loan.

More good news. Saizen REIT secured a new loan for the amount of JPY 500 million (S$7.5 million) from a Japanese financial institution, the Kumamoto Dai-ichi Shinkin Bank on 20 April 2011. This is for a term of almost 20 years up to 10 March 2031 and has an interest rate of 3.5% per annum.

The money was used towards the repayment of YK Shintoku's CMBS and taking into account YK Shintoku’s cash reserves, the net outstanding loan of YK Shintoku amounts to approximately JPY 0.7 billion (S$10.5 million).

The day when YK Shintoku would be unencumbered by any loan is drawing nearer by the day.

First REIT: 1Q 2011 results.

Feeling somewhat tired and was thinking of not checking my blog today. Then, I remember that First REIT would have announced their results this evening. All as well since I found some comments waiting for my replies. Would not do to make loyal readers wait too long. ;-)

First REIT delivered a set of results that is very much within expectations. I had expected a DPU of about 1.6c. It turned out to be 1.58c. Close enough. Gearing is at 13.8% which leaves the REIT plenty of room to gear up for future acquisitions. After all, the REIT plans to grow its portfolio from the current S$584.6 million to S$1 billion in the next 2 to 3 years.

Some numbers:
NAV/unit: 78.25c.
Interest cover ratio: 11.6x.
See presentation slides from AGM here.

The counter would go XD on 27 April 2011 and distribution would be made on 30 May 2011.

Could we see price moving higher from here? I am inclined to believe that it would although it should hit resistance at 76c to 77c in the immediate future if so.

Related post:
First REIT: Bought more at 73.5c.

AIMS AMP Capital Industrial REIT: 4Q FY2011.

A higher DPU of 0.54c was achieved for fourth quarter ended 31 March 2011 (4Q FY2011). This is partly due to the release of distribution retained in previous quarters which bumps up the distributable income for the quarter by S$708,000.

Since an advance distribution of 0.285c per unit was paid out on 28 March, 0.255c per unit would be paid out on 8 June 2011. XD on 26 April 2011.

Some numbers as of 31 March 2011:
NAV/unit: 27c.
Gearing: 32.0%.
Interest cover ratio: 5.7x
Weighted average debt maturity: 3.5 years.
Weighted average interest rate: 3.36% per annum
Weighted average lease expiry: 3.4 years.
Weighted average land lease expiry: 42.0 years

Substantial shareholders:
AMP Capital: 15.35%
Dragon Pacific Assets Limited: 11.98%
APG Algemene Pensioen Groep N.V.: 9.42%
Universities Superannuation Scheme Limited: 8.19%
George Wang: 7.19%

See presentation slides here.

AIMS AMP Capital Industrial REIT achieves DPU of 0.54 cents for 4Q
Tuesday, 19 April 2011

© 2011 - The Edge Singapore

Related post:
AIMS AMP Capital Industrial REIT: Stronger numbers.

CapitaMalls Asia and NOL: Increased exposure.

The STI retreated 19.01 points today to close at 3,125.37. Volume was rather low with only 1,075,913,210 shares worth a total of S$1,329,106,068 changing hands. Low volume on a down day is good news for bulls as it suggests a lack of conviction on the part of sellers. Today, I increased exposure to CapitaMalls Asia and NOL.

CapitaMalls Asia's trading volume reached its highest in 5 days and my buy queue at $1.80 was filled as price touched a low of $1.79. In my last blog post on this stock, I said I would accumulate on weakness but only on further weakness and not $1.83. $1.80 would be a hedge while I would accumulate further if price were to test $1.76.

Could $1.76 be tested in the next couple of days? Possibly since that would be also be a test of the 61.8% Fibo fan line. Momentum oscillators are all declining and could be testing 50% soon for support. Downside could be pretty limited from here. This counter has a compelling story to tell and the dual listing exercise once underway could provide it with some strong upward momentum. In the meantime, the descending 100dMA provides resistance and I could do a contra if price were to go that high in the next two days.

Earlier on, I had thought of NOL as forming a mild uptrending channel. That picture is now changed as a new low was formed today at $1.88. I bought more at $1.89 or 1 bid lower than the support of the range which I have identified as between $1.90 and $2.01. I like how a white spinning top was formed as price declined on reduced volume compared to the session before.

I also like how the MACD has a higher low even as price formed a lower low. Momentum is still encouraging and coupled with the white spinning top, we could have a rebound as the Stochastics seem to have declined into oversold territory too quickly. A retest of the 20dMA at $1.96? Perhaps so and that would be a nice price for a contra.

Related posts:
CapitaMalls Asia: Accumulate on further weakness.
NOL: Going higher?

CapitaMalls Asia: Accumulate on further weakness.

CapitaMalls Asia has a strong resistance at $1.88. That is quite obvious. This resistance level was breached in many recent sessions although price did not close any higher. If the counter's share price were to move to retest this resistance level again, it could very well give way to higher prices. In the meantime, a pull back is underway.

Today, only 123 lots out of a 3,434 lots changed hands at $1.83. This is the immediate support identified before. The next support level is at $1.80, which was a weak resistance which gave way on 5 April. This weak resistance could be a stronger support as it is where we find the golden cross formed by the rising 20dMA and the flat 50dMA. If this should break, I see support at $1.76 which is suggested by candlesticks and the approximate position of the 61.8% Fibo fan line.

What am I going to do? Well, seeing how the pull back is on rather low volume, I am inclined to accumulate on weakness. However, seeing the momentum oscillators still bordering on overbought, it would not be wrong to wait for further weakness before accumulating. So, a buy queue at $1.80 as a hedge and another buy queue at $1.76? Perhaps.

Related post:
CapitaMalls Asia: Waiting for a correction.

Healthway Medical: Technically interesting.

I have blogged enough on the fundamentals of Healthway Medical for regular readers to know that I would not increase exposure anytime soon. The management has some way to go to prove themselves, that they could execute their strategies successfully.

Technically, however, it is looking somewhat interesting as the 20dMA is rising and could form a golden cross with the 50dMA. It suggests that the share price could have found a floor for now. Stochastics is now in the oversold territory and +DI has the advantage. Squeezing Bollinger bands suggest reducing volatility of late and we could see the counter's share price moving sharply up or down in the near future.

Successfully overcoming the nearest trendline resistance could see price testing a high of 14.5c/share.

Related post:
Healthway Medical: 1 for 8 rights issue.

Cache Logistics Trust: Testing supports.

In my last blog post on this Trust, I said that we should watch for a retest of supports at 93c and 92.5c. Today, those prices were tested as price touched a low of 92.5c before closing at 93c. Although volume was much higher relative to the preceding sessions, it is lower compared to 23 Feb, 15 and 24 Mar when the same prices were tested and even breached in the case of 15 Mar. This is an important development as it suggests that selling pressure has seemingly reduced.

As the ADX still suggests a lack of trend, look to the Stochastics for guidance. It suggests that the counter is now oversold. The potential for a reverse head and shoulders pattern remains just a potential for now. Although I think that there is a nice chance it could come to fruition, Mr. Market could have other plans. I would hedge and I have put in my buy queue at 92.5c. If the support should hold, I would then buy more.

Related post:
Cache Logistics Trust: Accumulate on weakness.

Golden Agriculture: Waiting to increase exposure.

Although I might not blog about it as much as before, regular readers of my blog would know that I like Golden Agriculture as I feel that CPO's price has only one direction to go in the foreseeable future. Golden Agriculture, amongst the CPO counters listed in Singapore, is the most levered to CPO's price.

I have been waiting for a meaningful pull back to increase my exposure to this counter. In an uptrend, it would mean waiting for a retest of supports before buying. The instances when I was impatient and when I chased prices higher were instances which I regretted, more often than not.

So, is Golden Agriculture in an uptrend? No doubt about it. When to buy more? Ah, that's the question that is more interesting for most people, I am sure.

If we connect the highs of 4 March and 11 April, we get a trendline resistance.  If we connect the lows of 23 Feb and 15 March, we get a trendline support. If we take a step back, we might see that this is an uptrending channel. If we look at the candlesticks, we see significant resistance at 72c and support could be found at 65c.

Price touched a low of 68.5c in the last session which is where we find support provided by the 50dMA. If this were to break, we could find the rising 200dMA tested for support and this is at 66.5c. Having failed twice as support before, it does not seem very trustworthy and people could possibly choose to err on the side of caution and wait for a retest of channel support which should approximate 65c next week. Buy some if the 200dMA should be tested (as a hedge) and buy more if channel support should be tested later? Sounds like a strategy I would employ.

The chances of price going lower are high. The +DI now coincides with the -DI and the ADX is under 20. There is no trend per se and we could see the Stochastics move lower to test its own trendline support. A bearish crossover on the MACD is a foregone conclusion while the MFI and RSI have broken their respective trendline supports. I will wait to accumulate at stronger supports.

Related post:
Golden Agriculture: Alarm bells aplenty?

Hyflux director divested all his shares!

Lee Joo Hai, a director of Hyflux, divested his shares completely at $2.18 per share in open market sale at own discretion on 15 April 2011. 

Total: 375,000 shares. 

As an insider, could he know something that we retail investors don't? Probably.





In my last blog post on the subject, I had mentioned that 

"the news that Hyflux is issuing preference shares with an annual dividend rate of 6% is somewhat surprising to me. In an environment of low interest rates, isn't paying a 6% interest a bit expensive? 

"It would only make sense to do this if borrowing from a financial institution would be costlier and it would only be costlier if the company and/or its business is perceived to be high risk."





Judging by how well the response is to the placement shares, which were 7x oversubscribed, I expect the ATMs to see long queues as people try to get their hands on some of these preference shares. 

Application closes on 20 April and the shares will start trading on 26 April. 

Good luck to those interested.

Related post:
Hyflux: 6% perpetual Class A preference shares.

Industrial rent forecasts strongest for Singapore.

This research paper on Asia Pacific real estate by DTZ Research was published on 23 February 2011. DTZ Research rates properties as HOT, WARM or COLD.  HOT refers to properties severely undervalued. WARM refers to properties somewhat undervalued to somewhat overvalued. COLD refers to properties which are very much overvalued.

It is very interesting to see that Singapore properties are rated as HOT for all three markets researched, namely, office market (-12%), industrial market (-14%) and retail market (-8%).  In more detail, HOT refers to an investment where investors can expect to make returns higher than the risk adjusted rate of return. Markets estimated to be more than 5% under-valued are classified as HOT. To put things in perspective, the office and industrial markets in Hong Kong are rated COLD. Taipei's industrial market is also rated COLD.

As I am heavily invested in industrial properties S-REITs, notably in AIMS AMP Capital Industrial REIT and more recently, in Cambridge Industrial Trust, Cache Logistics Trust and Sabana REIT, I am pleased to have affirmation from DTZ Research when I read this:  "Singapore, a traditional powerhouse in trade and logistics, is expected to be the best industrial performer over the forecast period in terms of rental growth, forecast at 3.6% pa." Refer to page 8 of the research paper. See it here.

Related post:
Higher rents to benefit industrial properties S-REITs.

Tea with AK71: Hainanese pork chop rice.

I like Hainanese pork chop rice. I know there are two versions: with curry or with tomato sauce watered down. This one at Redhill Market (supposedly a branch of a famous stall in Chinatown) sells the former while I know quite a few hotel cafes serve the latter.

Pork chop (very yummy), chap chye (stewed vegetable) and a hor pau dan (sunny side up, Chinese style) on steamed rice drenched in curry! Price: S$2.50.

Cambridge Industrial Trust: Excess rights results.

I checked my savings account and saw the partial return of funds used in the acceptance of rights and application of excess rights in Cambridge's rights exercise.

In total, I have 4 lots of rights units: 2,125 accepted rights and 1,875 excess rights. Add this to the initial 17 lots which I bought at 51c per unit, I have 21 lots now at an average price of 49.46c per unit. Let's just round it up to 49.5c per unit. With a DPU of 4.84c, post rights, that's a distribution yield of 9.78%.

Related post:
Cambridge Industrial Trust: Going for excess rights.

Cache Logistics Trust: Accumulate on weakness.

We could be seeing the final move in the formation of a reverse head and shoulders pattern. Volume has been reducing as price weakened from a high of 96c on 4 April. The counter closed at 93.5c today.

What do I like?

1. Low volume pull back.

2. ADX suggests a lack of trend. Looking at the Stochatics, it has entered oversold territory.

3. Potential reverse head and shoulders pattern. Watch out for price possibly testing 93c or even 92.5c for support.

4. Results and income distribution will be announced on 26 April. Expecting that to be a catalyst to send price higher.

So, if the pattern is valid, how high could the price go? Well, the low of the pattern was seen on 15 March and that's at 91c. The neckline of the pattern is at 96c. Projecting this difference forward would give us a target of $1.01. Not too bad, if I do say so myself. I am accumulating on weakness.

How to identify investment opportunities?

Macquarie Capital Securities (Singapore) Pte. Limited's quarterly seminar is here again. This time, hear from TRADING Central, the global independent chart specialists. They will be speaking for the first time in Singapore!

Hear from Mr Jun Zhang, Head of Asian Research for TRADING Central. He will be giving his views on the outlook for the global and regional equity markets. He will also be offering some insights as to how TRADING Central identifies investment opportunities for clients globally.

Mr Zhang has a Masters in Finance from the University of Paris and a Masters in Mathematics from the University of Shanghai. In his current role, he provides daily trading strategies for the Asian stock markets.

There will also be a short presentation on warrants and how to leverage your trading views without the risk of margin calls.

Admission to the seminar, as usual, is FREE.

Register soon as seats are limited: http://www.warrants.com.sg/en/seminar/seminar_e.cgi

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Tea with AK71: Burger King Sundae Promo!

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http://www.churpchurp.com/AK71SG/share/bk-sundae

NOL: Going higher?

Just yesterday, I initiated a long position in NOL at $1.95. Today, it closed at $2.01, forming a long white candle in the process. The fact that 1,918 lots were bought up at $2.01 after market closed is promising and we could see resistance at $2.01 broken tomorrow.

Further upward movement in price could see a gap close at $2.05 which coincides with the declining 50dMA. Going higher would see resistance at $2.09 (200dMA) and $2.13 (100dMA). All the momentum oscillators are midway of their own range and whichever direction the share price decides on moving, we could see some distance travelled before it becomes either overbought or oversold.

When would I divest? Well, if price continues to rise in the next couple of days, I could do a contra and keep the gains. Zero cost.

On the weekly chart, a strong resistance shows up at $2.07. This is provided by the declining 50wMA and 200wMA. Could we see $2.07 tested in the next couple of days or would the price sink to test support at $1.95 once more?

Related post:
NOL: Initiated long position at $1.95.

CapitaMalls Asia: Waiting for a correction.

Quite a few people I know have fully divested their investments in CapitaMalls Asia. They did this as the counter tested resistance at $1.88 many times recently. Looking at the daily chart, it is obvious that $1.88 is a strong barrier to further upward movement in price. So? Sell at $1.88 or, if we are lucky, higher on whipsaws, and wait for price to pull back before buying in again? If only life were that simple and if only Mr. Market were that cooperative.

Personally, I am also waiting for price to weaken to supports at $1.83 and $1.80 before increasing my exposure to this counter. Look at the MFI and RSI and we see them bordering on overbought. However, remember that in very bullish conditions, things could stay overbought for quite a while. So, being overbought doesn't mean much and it does not mean that we would see a correction in price.

Look at the ADX and we see that it is rising. It is rising as the +DI has the advantage. So? Buy on any pull back to supports. That's conventional wisdom in an uptrend. That is what I would like to do.

Now, what could go wrong? Remember what Guppy said before? We could either have a correction in price or a correction using time. In the latter case, price could simply move sideways until the rising 20dMA catches up with it before going higher.

See where the 20dMA is now? It is rising strongly and seems on track to form a golden cross with the 50dMA soon. This is a bullish sign, if a short term one. If price is indeed doing a correction using time, all of us waiting to accumulate at $1.83 and $1.80 would be very disappointed.

Personally, I am still vested and will not add to my position at current levels. If price should go higher, I see the next significant resistance at $2.00. If price were to weaken to supports, I would accumulate.

CapitaMalls Asia signs MOU with Japan’s Parco
Wednesday, 13 April 2011

© 2011 - The Edge Singapore

Hyflux: 6% perpetual Class A preference shares.

I owned units in Hyflux Water Trust in the past. That investment did very well for me and, unfortunately, the Trust was privatised not too long ago. Read blog post here.

Back in 2009, I was also considering between Hyflux and E-pure as beneficiaries of a global search for solutions to water problems. I went with E-pure simply because of valuation reasons. I have no doubt that Hyflux is a strong company in a strong industry too except that its valuation has always been too rich for me.

However, the news that Hyflux is issuing preference shares with an annual dividend rate of 6% is somewhat surprising to me. In an environment of low interest rates, isn't paying a 6% interest a bit expensive? It would only make sense to do this if borrowing from a financial institution would be costlier and it would only be costlier if the company and/or its business is perceived to be high risk.

The only preference shares that I have ever owned is DBS NCPS 6%. This was something I bought 10 years ago. Intuitively, and we won't be too wrong to say this, DBS is less risky compared to Hyflux. Indeed, if DBS should default, I think that's the end for Singapore.

In a nutshell, if I were to invest in Hyflux, it would not be for income, it would be for growth. To invest for growth, I would not invest in Hyflux preference shares. To me, it is that simple.

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Hyflux to offer $200m of perpetual preference shares
Wednesday, 13 April 2011

© 2011 - The Edge Singapore

Mapletree Commercial Trust: Strong demand.

I have been asked by many people if I would be interested in the IPO of Mapletree Commercial Trust.

While I am a regular shopper at VivoCity, I am not enthusiastic about the IPO of this Trust. Why? The distribution yield of 5.5 to 5.9% seems a bit low. This is based on the price range of $0.84 to $0.91 per unit.

Mapletree Commercial Trust to raise $924m in IPO: Update
Wednesday, 06 April 2011

© 2011 - The Edge Singapore

It has just been reported that the initial public offering has already been five times covered and the IPO is likely to be priced between the midpoint and top of the price range of $0.84 to $0.91 a unit.

It seems to me that there is still a lot of liquidity out there searching for better returns. Could we see a spillover effect to other S-REITs since there would be a lot of excess liquidity as this IPO is expected to be many times oversubscribed? Why not?

Mapletree Commercial Trust’s $924m IPO 5 times covered
Wednesday, 13 April 2011

© 2011 - The Edge Singapore

Allgreen: Looking to initiate a long position.

I was just reading Allgreen's 2010 Annual Report and I must say that I like the numbers:

EPS: 14.23c which means a PER of just 7.65x at today's closing price of $1.09 per share.

NTA per share: $1.62 which means it is currently trading at almost 33% discount to NTA.

Gearing (Net debt to equity): 0.18x (which I believe is very conservative).

Dividend per share: 5c (XD 5 May 2011) or a yield of 4.59% at today's price.

Technically, the counter could experience some near term weakness as recent attempt to move higher was half-hearted on lackluster volume. The descending 100dMA is still the resistance to watch and that is currently at $1.12. Volume has been increasing as price retreated. OBV has turned down rather sharply, a clear sign of distribution.

Connecting the lows of 24 Feb and 15 Mar would give us a trendline support and a move to test this support is likely as the Stochastics is still bordering on overbought. A correction of the overbought condition could see a weaker share price and I could initiate a long position at $1.06 or $1.07 (50dMA).

Capitaland: Testing support at $3.36.

I initiated a long position in Capitaland today at $3.38 and $3.36. This was after what I said in the last blog post on this counter: "The Fibo Fan connects the low of 17 March and the high of today. Now, what I am interested in are the positions of the golden ratios in the next few sessions. 38.2% would be at $3.38 and 50% would be at $3.32 in the next session. Notice how the 20dMA seems to coincide with the 50% line? This is likely to be a strong support, if tested. In between these two golden ratios, we find the 50dMA, still declining but gently so, at $3.36. This could provide some support as well."

So, am I going to put in another buy queue for tomorrow at $3.32? Nope, looking at the charts at the end of every day is what I do and the 50% Fibo Fan line is at $3.33 tomorrow. Before that, however, we could see price supported as it closes the gap at $3.34 (1 April). So, buy queues for tomorrow would be at $3.34 and $3.33 for me.

If I were to choose between Capitaland and CapitaMalls Asia, it would seem that the latter has stronger technicals. However, it would be wise not to put all the eggs in one basket, I guess.

Coincidentally, OCBC Investment Research just did a piece on Capitaland and I would like to share what they said here. Remember to take everything with a pinch of salt:
Chinese worries overwrought - BUY. With the Chinese government’s plan to build 36m low-income homes by 2015 and its increasing determination to curb property prices, we recognize the down-side risks from Chinese property prices. However, given CAPL’s current share price, we believe Chinese residential worries on CAPL are likely overwrought due to two reasons. First, Chinese residential exposure only takes up around 12% of CAPL’s total book assets (FY10, ex. cash). In addition, we believe major projects, such as the Paragon, are well thought-out and likely resilient in a weak market. We update our assumptions and maintain a BUY rating with a revised fair value of $4.10 (at parity to RNAV) versus $4.05 previously. Read complete report here.

CapitaMalls Asia: Pulling back to supports.

If we draw a trendline connecting the high of 6 Oct 2010 and 9 Feb 2011, we will get a trendline resistance which, more or less, was what limited the upside yesterday at $1.92. A doji formed yesterday suggesting indecision and a possible reversal. We have confirmation today as price closed lower at $1.85.

Immediate support is found at $1.83. Not only is this where the trendline support is approximating, it is also where we find many times tested resistance and supports in the candlesticks. If $1.83 were to give way, next supports are at $1.80 (50dMA) and $1.76 (rising 20dMA).

What would I do? I like what I see in the ADX. The +DI has the advantage and the ADX is rising. This could be an early uptrend forming. MACD is still rising in positive territory. Volume in the last two sessions were not very high as price experienced weakness. A correction at this stage to shake out some of the weaker holders is healthy so that the counter could form a firmer base for any further upward movement in price. Price has to climb a wall of worries and buying at supports in an uptrend is what I would do.

The overbought condition as seen in the MFI and RSI would have to be corrected and a meaningful pull back is more likely to happen than not. I will accumulate on weakness.

Related post:
CapitaMalls Asia: Strong uptrend emerging.

NOL: Initiated long position at $1.95.

My overnight buy queue for NOL at $1.95 was filled today.

NOL has emerged from a downtrend which started on 7 February but it is still within a downtrend which started on 5 January. It is currently moving sideways and we could possibly see some rangebound trading in the near future with $2.01 and $1.92 as the upper and lower limits. Would price move up or down from here? The Stochastics is currently flat at 50% and there is equal chance for upside and downside in the near term.

Any weakness which might lead to a test of support at $1.92 could see me increasing my stake in the company.  This is because the weekly chart shows a rising 100dMA, currently at $1.90. Only after 2 days into the week, it is easy to see that $1.95 seems to be an important pyschological support level for NOL's share price and, thus, I believe, buying in at $1.95 cannot be too far wrong.

Related post:
NOL: Out of the doldrums?

First REIT: Bought more at 73.5c.

Today, I bought more units of First REIT at 73.5c. It should be quite obvious that the unit price of this REIT has gone into a trading range. There is no trend.

In my blog post of 1 April, I said "The REIT's price action looks rangebound and if we believe that there is no trend, we should pay attention to the Stochastics which suggests that the REIT is correcting from an almost overbought position. So, more weakness to be expected? Possibly and I am waiting to accumulate on any further weakness."

The Stochastics were coming off a high of 80% in late March. It has now flatlined at 50% which sometimes act as a support in a decline. With Stochastics no longer bordering on overbought, could we see price pushing the higher end of the range in the near future?

The rising 100dMA seems to be providing some measure of support and this is now at 73c. 74.5c is a many times tested resistance and would have to be cleared before price could go higher.

With the quarterly report and income distribution announcement drawing nearer day by day, a positive catalyst for price to move higher in the near term is possibly at hand. Could we then see a retest of January's high of 77c? Why not?

Related post:
First REIT: Bought more at 73c.

Capitaland: Insights with Fibo Fan.

In my last blog post on Capitaland, I said that "With immediate resistance at $3.54 (100dMA) and a possible whipsaw to $3.56 (gap resistance and 50% Fibo fan line), the near term upside could be limited from the current level. Support is at $3.41 in the next couple of sessions. This is a natural candlestick support and it coincides with the trendline support. A retest of support could see me initiating a long position in this counter." Read it here.

Today, Capitaland's share price pulled back and closed at $3.44, the low of the day, after touching a high of $3.53, just approximating the 100dMA. A test of support at $3.41 is very likely. The original plan was to initiate a long position at $3.41, if tested. Seeing, however, that the momentum oscillators are still bordering on overbought despite the pull back in share price, I decided to get some insights with a Fibo Fan.

The Fibo Fan connects the low of 17 March and the high of today. Now, what I am interested in are the positions of the golden ratios in the next few sessions. 38.2% would be at $3.38 and 50% would be at $3.32 in the next session. Notice how the 20dMA seems to coincide with the 50% line? This is likely to be a strong support, if tested. In between these two golden ratios, we find the 50dMA, still declining but gently so, at $3.36. This could provide some support as well.

So? Much safer entry point is at $3.32 while entry at $3.38 could be considered as a hedge. What about $3.41? Yes, that too could be considered a hedge although I am inclined not to put in a buy queue at $3.41 anymore because the momentum oscillators are still bordering on overbought.

Golden Agriculture: Black spinning top.

Golden Agriculture started the day bullishly enough but ended the day at 72.5c after touching immediate support at 72c. A black spinning top was formed, suggesting market indecision. This could be a reversal signal as indecision in an uptrend is not good news for bulls.

Support is currently provided by the flat 100dMA. With the momentum oscillators in their overbought territories, a pull back is not unlikely. Breaking support at 72c could bring out the sellers. However, the steeper uptrend which started on 15 March would still be intact if its trendline support holds up and this would be at 70c or so in the next two sessions. If this were to fail, the next supports are at 68.5c (50dMA) and 66c (200dMA).


Related post:
Golden Agriculture: Overcame resistance at 72c.

CapitaMalls Asia: $2.17 target price?

I remember that someone told me that DBS Vickers had a target price of $2.51 for CapitaMalls Asia and wondered why the share price of this company has been so weak. Well, valuation is a subjective exercise.

For example, OCBC Investment Research published a report with a target price of $2.17 for CapitaMalls Asia on 7 April 2011. Yes, this was just a few days ago. Does it mean that the share price is going to hit $2.17 in the next few days? It could happen, of course, but I won't bet my bottom dollar on it.

Having said this, it is always good to see what others have to say and OCBC Investment Research did raise some good points:

For CMA, China is the key growth market. CMA has three key operational advantages in China: Firstly, it has the ability to leverage on its extensive tenant network. Second, it has demonstrated diligence and success in using asset enhancement initiatives (AEIs) to grow its net property income (NPI). Thirdly, there would be a trend of decreasing dependence on anchor tenants as malls mature and this would further boost NPI.

CMA’s business model in China is a resilient one due to its focus on mid-high income segment instead of the volatile high growth-high margin luxury segment. While its downside is sheltered, CMA is poised to benefit from the expected steady growth in China’s retail consumption and middle class population.

Read full report here.

Related post:
CapitaMalls Asia: Strong uptrend emerging.

Golden Agriculture: Overcame resistance at 72c.

Golden Agriculture overcame resistance at 72c. This is a many times tested resistance and it is also where the 100dMA is approximating. Volume was not exceptionally high which makes the breakout somewhat less convincing but a breakout is a breakout and should be treated as such.

In the next session, we could see breakout chasers buying up the shares of  this counter. This could initially push price higher to close the gap formed on 20 January 2011 and this would be the immediate target of 76c. In time, we could see price overcoming gap resistance with an eventual target of 80c.

For anyone who might want to take a chance that the counter would go higher in price, a smallish hedge is wise since momentum oscillators are all in their overbought regions. With trading volume unimpressive, a pull back to retest supports cannot be ruled out.  Resistance turned support at 72c, unbroken if retested, would be a more ideal entry price than buying at a high.

If a long position were to be initiated at or closer to 72c successfully and if price were to move higher, this would probably be more of a short term trade. Why? Look at the weekly chart for an idea of the longer term picture. From the week of 21 February 2011 to the week of 4 April 2011, weekly volume has been reducing as price moved higher. A negative divergence? You got it.

If we scrutinise the MFI and the RSI, we see lower highs and lower lows as well. So? Price has been rising on weaker momentum. It does not mean that price cannot move higher, it just means that the chances of a breakdown is higher since the breakout is weaker. Being nimble is important here and less greed could be a good thing too.