CapitaMalls Asia: Testing historical low.

On 9 Dec, I mentioned: "Closing at $1.92 is at support provided by the 138.2% Fibo.  38.2%, being one of the 3 golden ratios, is quite strong and if it breaks, the other 2 golden ratios are 50% and 61.8%.  The 150% Fibo and 161.8% Fibo lines are at $1.88 and $1.85 respectively. If the selling pressure keeps up, we could see prices go to those levels. Then, I would be sorely tempted."

Price formed a wickless black candle as it tested the counter's historical low at $1.91. The difference? On 7 May, when $1.91 was touched, a white candle was formed. It looked like a white spinning top with a long body which was a potential reversal signal and it delivered. This time round, a wickless black candle was formed as price closed at $1.91. The picture is more bearish now, for sure.

With all the momentum oscillators forming lower highs and the OBV showing obvious distribution, going long on this counter now would be most risky. Any upmove could simply be a rebound from oversold conditions and would find immediate resistance at $2, a recently many times tested resistance level and it is also where we find the declining 20dMA. I have my eyes on $1.88 and $1.85 as possible fair entry prices.

China Hongxing, Healthway Medical, Sabana REIT and First REIT.

I was wondering whether to take a break from blogging tonight but once I switched on my computer, I just had to check my blog. Before I knew it, I was blogging. This is a most serious addiction.


China Hongxing: Last night, "Closing at 17c is resistance provided by the falling 50dMA which just completed a dead cross with the rising 100dMA recently. Technically, China Hongxing has just broken out of its downtrend but it remains to be seen if 17c resistance could be turned into support. Falling back under 17c would mean that the downtrend is still intact." 

So, 17c is still resistance and I see strong support at 15.5c. If volume does not expand on the next upmove to push past resistance, the declining 50dMA could well prescribe the next downtrend resistance. However, with the MACD rising towards zero, we could see momentum turning positive. This counter bears watching.

Healthway Medical: Last night, "Price could first retreat to 16c, a many times tested resistance and now possible support, before closing the gap at 15.5c. In case the bearish reversal signals are nullified in the next session, the upside target is still 18.5c."

Its share price closed at 16c today and I fully expect 15.5c to be a strong support, if tested. Both MFI and RSI are retreating from the borders of their overbought regions and we could see them retreating to retest their uptrend support lines. This would mean a further weakening in price and a thinning in volume. I would want to see support holding up nicely before venturing with another long position here. Overly cautious? Perhaps but that's what I would do.

Sabana REIT: Last night, "the white spinning top, a possible reversal signal, formed today on low volume is encouraging. Volume was the lowest since the REIT started trading in late November. OBV also seems to be rising since 7 Dec, suggesting continual if mild accumulation since. Selling pressure has weakened and if 92.5c was ever tested again, it would be a stronger support as market participants would remember it as the price they missed out on to go long. The worst could be over."

Volume expanded nicely as price rose to hit a high of 96.5c before closing at 95.5c. There is some selling pressure as suggested by the upper wick of the white candle. However, selling pressure is much weaker now and OBV suggests that accumulation is ongoing.  For anyone who is thinking of investing in Sabana REIT, it would seem as if things have stabilised. Technically, 94c (the 38.2% Fibo line) and 93.5c (the 23.6% Fibo line) are fairly safe entry prices now.

First REIT: Last night, "What we see today is a textbook example of a bullish harami, a bullish reversal candlestick setup."

We have confirmation of the bullish signals formed yesterday. Buy signal seen on the MACD histogram. Price gapped up, starting the day at 68c, touched a high of 69.5c and closed at 69c. Resistance provided by the 100dMA at 68.5c was taken out with ease. With volume much lower, it suggests that there is a lack of sellers which allowed little buying to push up the price. 68.5c could be resistance turned support. Next resistance level is at 70c.

The rights closed at 17.5c today and for anyone who is thinking of investing in First REIT, buying the rights at 17.5c would make more sense than buying units in First REIT at 69c. There is a 1.5c difference which is a 2.18% savings. If there should be further selling down tomorrow, I would buy more, tomorrow being the last day for the trading of nil-paid rights. 22 Dec is the last day for the acceptance and payment of the rights.

First REIT: A bullish harami.

Volume expanded again today with a total of 12.21m units changing hands. This time, a white candle was formed. With price opening at 67c and closing at 67.5c, this is a wickless white candle. Also, this formed right in the mid-section of the previous session's black candle.

Remember, I mentioned yesterday that "the black candlestick formed this session is not as bearish as the three black candlesticks before it. It actually started in the middle of the previous session's candlestick and it also formed a lower wick unlike the previous three candlesticks. Support is at hand." What we see today is a textbook example of a bullish harami, a bullish reversal candlestick setup. As with all technical analysis, this will need confirmation in the next session.

It is my personal belief that the 200dMA support at 67c has been recaptured.  Further upward movement in price would find immediate resistance at 68.5c.  This will be followed by 70c and 71c. In due course, if these resistance levels were cleared, the counter could cover the gap at 73.5c. There are some who are still waiting to see how low the price could fall before buying in. Their hands could be forced in the next two days if price continues to be resilient and this would contribute to a further strengthening in price.

I count it fortunate that I managed to collect some rights at 16c yesterday (effective cost = 66c). I queued for more mother shares at 64.5c last night in case price weakened further today. 64.5c now seems rather remote as a possibility. With the OBV turning up sharply, the suggestion is that accumulation is back in force. Let us see if the long term support at 67c holds up from now.

Related post:
First REIT: Good bad news.

Sabana REIT: Possibly bottomed.

92.5c touched on 10 Dec could possibly be the bottom which worried unitholders are looking for. As with all bottoms, it is only apparent after some time. In fact, calling it a bottom now could be a tad early.

However, the white spinning top, a possible reversal signal, formed today on low volume is encouraging. Volume was the lowest since the REIT started trading in late November. OBV also seems to be rising since 7 Dec, suggesting continual if mild accumulation since. Selling pressure has weakened and if 92.5c was ever tested again, it would be a stronger support as market participants would remember it as the price they missed out on to go long. The worst could be over.

Related post:
Sabana REIT: Touched 92.5c.