Capitaland: More downside?

My purchase of more shares in Capitaland yesterday at $2.81 per share, unfortunately, did not turn out well. Today, its share price closed at $2.75, the day's low. There are some very determined shortists. The bears have won for now. Well, this is the risk one has to accept if one were to go long in a downtrend when there are no clear reversal signals. Too bad for me.

I am going to employ Fibo lines which have worked so well for me on other occasions to help determine where would we find the next support. Taking the high of $4.23 as 0% and $3.08, a natural support as 100%, we see a clearer picture.

$2.81 is where we find the 123.6% Fibo line, not a golden ratio and, as it turned out, it was a weak support which held up for a while in the morning. The next support is at $2.64. This is provided by the 138.2% Fibo line, a golden ratio and likely to be stronger. In the absence of a rebound, I would keep an eye on this price if it should be tested.

Fundamentally, Capitaland is now trading at a 21.4% discount to its NAV of $3.50 per share. I still get a feeling that it is very oversold and that a technical rebound is overdue. Of course, Mr. Market does not care two hoots what I feel.

For investors still keen on property stocks, the key is to be extra selective. Daiwa Securities recommends CapitaLand, which it notes has underperformed the local market “significantly” over the last 12 months. “We believe the market has sold down CapitaLand shares to a level where nearly all of the future policy risk (in China and Singapore) has been priced in.”

Daiwa adds what while home prices in Singapore and China may stagnate or even decline, CapitaLand’s combined residential property exposure in the two countries accounts for less than 20% of its overall assets. Daiwa has an “outperform” rating and $3.50 price target on CapitaLand. The stock closed at $2.75 on June 17.
(Source: The EDGE Weekend Comment Jun 17)

Related post:
Capitaland: Average buy price of $2.81.

Golden Agriculture: Contra at 68.5c.

Golden Agriculture saw 90,289 lots changed hands today with 15,147 lots done at 68.5c after market closed.

In my last blog post on Golden Agriculture, I identified 68.5c as the immediate resistance as provided by a confluence of the 20d, 50d and 100d MAs. So, I put in a sell order last night for those units which I bought at 66c yesterday. My sell order was filled, locking in a gross gain of 2.5c or 3.78% in one day. In uncertain times, I suppose it makes sense to lock in gains quickly and not tempt Fate, especially over the weekend.

If 68.5c could be overcome convincingly next week, the next significant resistance is at 70c. I might sell more of my shares in Golden Agriculture then.

Related post:
Golden Agriculture: Bought at 66c.