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1. Fundamentally, CMA has a NAV/share of $1.52. At $1.335, it is trading at a 12+% discount to NAV. CMA is likely to do better in time.
2. Technically, the MACD seems set to form a higher low as the counter's share price forms a lower low. A positive divergence is almost a given.
Flip side of the coin?
A. Fundamentally, CMA's increasing exposure in China is a double edged sword. China's efforts to temper inflationary pressures could lead to a slowing down in its economy which could affect CMA's business negatively as retailers feel less confident taking up more space in the malls.
B. Technically, after a gapping down and the formation of a long black candlestick on the back of very high volume, we could see price going lower in the next session. The selling pressure is very strong, no doubt about it.
In case we see a reversal in price action, we could expect gap cover at $1.395 to take place. A quick trade once again? Perhaps.
In case price declines further? Let me use Fibo lines to see where we might find stronger supports.
See how price hit the 123.6% Fibo line before closing a bit higher today? However, this is not a golden ratio and further weakness could see price testing $1.30 (138.2% Fibo line), $1.285 (150% Fibo line) or $1.265 (161.8% Fibo line) for support.
Good luck!
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