Sabana REIT: Positive divergence.

In an earlier blog post, I mentioned that we should "Keep an eye on the MACD and see if a higher low forms as price forms a lower low. We are on the lookout for a potential positive divergence." A higher low has formed in the MACD and we have a positive divergence.

The formation of a positive divergence does not mean that the unit price is going to fly higher right away. A significant resistance presented by the declining 20dMA at 94c would have to be cleared first. Drawing a Fibo fan, it is also interesting to note that price is currently at the 23.6% Fibo fan line. This is not one of the three golden ratios and is a weaker resistance but it is a resistance nonetheless.

Overcoming immediate resistance at 94c would see price going higher. Long suffering unitholders of this underperforming REIT could have a respite soon if this should be the case. Good luck.

Related post:
Sabana REIT: Initiated long position.

Cache Logistics Trust: When would I buy more?

Cache Logistics Trust went as high as 96c/unit today before closing at 95c/unit, forming a gravestone doji in the process. Buying more at current levels means a smaller margin of safety, for sure. Volume was also lower as price tried to move higher. A picture of negative divergence is forming: rising price and falling volume.

Connecting the lows of 15 March and 24 March gives us a trendline support. Waiting for price to pull back to this support level before loading more would be sensible. This is currently at 94c which is also where we find the flattening 20dMA. In rather bearish circumstances, we could even see price breaking support, be it a whipsaw or not, to touch 93c. I could buy more then.

Having said all this, if a person is worried about missing the boat and would really like to initiate a long position, 95c could be a hedge. Why? Well, the momentum oscillators are all rising nicely: the MACD lookings like it could be crossing into positive territory soon. Using a Fibo fan, we also see that  95c is exactly where we find the golden ratio 61.8% and if this were to be established as a support, unit price could touch 97c in the near future.

Cache Logistics Trust has strong fundamentals and its technicals have strengthened. However, I am not one to chase after rising prices. If the opportunity presents itself, I would buy on weakness.

Related posts:
Cache Logistics Trust: Initiated long position at 91.5c.
Cache Logistics Trust: Positive divergences.