CapitaMalls Asia: Upgraded by Daiwa.

CapitaMalls Asia broke out of a downtrend on 2 Sep and touched a high of $2.25.  Today, Daiwa upgraded CapitaMalls Asia to outperform but the share price fell instead to $2.20.  Could price fall further?

The MACD histogram has turned red. This is a sell signal. MFI has formed a lower high which suggests weakening demand. OBV shows a slowdown in accumulation but there isn't any serious reversal.  RSI has dipped and left the overbought territory behind.  The current weakness could just be a correction from overbought conditions. If so, where is the next support?

I see the next support at $2.14, a many times tested candlestick resistance level and should be a strong support. This is also where we find the downtrend resistance line which the counter broke out of on 2 Sep. This price level is likely to be fresh on the minds of market participants.

CapitaMalls Asia upgraded to Outperform by Daiwa... says property group’s recent $788.9 million joint acquisition with CapitaLand (C31.SG) of Singapore’s Bedok Town Centre site, which can be developed into residential-cum-retail property, reinforces CMA’s dominance in local retail property market.

Wednesday, 08 September 2010

© 2010 - The Edge Singapore

China Hongxing: New target.

Yesterday, when Edmond asked if we should set a higher target for China Hongxing at 22c, I replied "22c is what could be the eventual target if 19.5c is taken out convincingly (ie. volume has to expand significantly as price rises). However, along the way to 22c, there are many minor resistance levels to overcome."

Well, 19.5c was demolished as the price touched a high of 20.5c before closing at 20c today. This was achieved on very high volume. 20.5c was a resistance level that broke in early January.  Based on Fibo lines, it looks like a minor resistance and we could see 22c tested next (138.2% Fibo line). Congratulations, Edmond. :)

OBV is still rising strongly signalling continuing accumulation. The uptrend in the MFI is intact as it formed higher lows.  Demand is still strong.  It is however on the verge of being overbought but this does not really mean anything apart from suggesting that we stay vigilant, especially with such strong underlying momentum.

This is possibly the reason for the breakout:

China Hongxing Sports bags $198m worth of orders from Xiamen trade fair. The order book of RMB 1 billion represented a 12.6% increase as compared to that held in August 2009.
Wednesday, 08 September 2010

© 2010 - The Edge Singapore

Related post:
China Hongxing: Pushing upwards.