First REIT: Partial divestment at 79c.

I was working late today. Trying to figure out some computer related stuff and trying to get used to a new software. This is likely to remain a challenge for me at least over the next few days. I am definitely one of the least IT savvy people around but this is life, I guess.

Although I would like to crash into bed right now, I thought I should blog about my sell order for First REIT at 79c which was partially filled today. Sold some First REIT at 79c? Why?

Given the volatility in the stock market, I guess it should be a prudent decision to lock in some gains if we could. After all, the REIT is not going to distribute income for at least another three months down the road and there is a chance of further downside with sentiments so weak.

The black candle today was formed on the back of relatively low volume, however. Selling lacks conviction although it does not mean that price cannot drift lower.

77c, the low of the day, is where we find the 100dMA. 77.5c, the closing price, is where we find the 200dMA. These prices are immediate supports. If these were to go, I would expect price to go lower.

79c is a natural candlestick support turned resistance. If it should break on the back of higher volume, we could see gap covering at 81c. Before that, 80c should provide some formidable resistance for various reasons, technical and fundamental.

Good luck to fellow unitholders.

CapitaMalls Asia: Pre-emptive strikes failed.

Quite a few regular readers and friends are perplexed why I was buying shares in CapitaMalls Asia when it is clearly in a persistent downtrend. I replied that I was pre-empting a possible reversal as it looked like a positive divergence could emerge. Today, that possibility went out the window as the MACD formed a lower low as price weakened.

So, the technical reason I had for buying more shares in CapitaMalls Asia is no longer valid and I will not add to my long position anymore until the picture changes. Will I cut loss? I will only do so in a rebound. I will not do so as price goes lower. That has been my practice.

Prices rarely go up or down in a straight line. They climb a wall of worries and go down a river of hope. With CapitaMalls Asia, a rebound in share price could see gap filling at $1.325 per share. Whether this will happen or not, nobody knows for sure. If it happens, I will reduce my exposure.

Fundamentally, I still like the company's exposure to the growing middle class in China. These people have greater discretionary spending power and shopping malls in China will see strengthening demand over time. This will translate to higher asking rents and higher valuations for malls.

I also like how the RMB is likely to strengthen in time and this would mean that the NAV of the company will only go higher in S$ terms. How long will this take? Your guess is as good as mine.

Only one person knows for sure and he is Mr. Market. He will decide when the share price of the company will trade higher. Having failed to pre-empt Mr. Market's movements successfully, it is now back to basics while I wait for clearer signs.

Related post:
An elaboration on my methods.