Capitaland: Pushing higher on lower volume.

Capitaland's share price touched a high of $2.66 and closed at $2.65. Remember that I mentioned that in very bullish circumstances we could see $2.65 or even $2.75 tested? This is still valid.

I did a partial divestment at $2.65 today. If the following week should see price pushing higher, I would be happy to divest once more. $2.75? It could happen although I see the declining 200dMA now at $2.73. This could limit further appreciation in price. Although bulls could push past this resistance, it would surprise me (pleasantly) if price could close above the 200dMA. Why do I say this?

Look at the trading volume. It has been reducing. Indeed, volume is also lower this week as compared to last week. Volume is the fuel that drives rallies and reducing volume could be an early signal of coming weakness in price. Volume precedes price.

Momentum oscillators also signal that greater caution should be exercised. On the daily charts, the MFI has entered overbought territory while the Stochastics has been overbought for some time. It is riskier to go long at present despite the return of positive momentum as shown by a rising MACD in positive territory.

Long holders could consider selling while anyone thinking of buying could consider waiting for a pull back to supports.

Related post:
Capitaland: Partial divestment at $2.48.

First REIT: FY2011 results.

DPU for 4Q 2011 is 1.93c which is another bumper distribution! The REIT will go XD on 1 February and the income distribution is payable on 29 February.

This includes distribution coming out of a portion of the total gains on divestment of the Adam Road property of about S$8.7 million.

Without such a return of capital, the DPU for 4Q 2011 is 1.61c. Annualised DPU is, therefore, estimated to be 6.44c. To calculate a more realistic distribution yield, we have to use this number. At the unit price of 77c, we get a distribution yield of 8.36%.

NAV/unit: 80.5c
Gearing: 16%
Interest cover ratio: 12.3x

Technically, volume has been rising but price has plateaued at 77c which seems like a difficult resistance to overcome.

How would Mr. Market react to the REIT's results? Could we see price action breaking resistance at 77c and going higher? If resistance should be overcome, there is a chance of a retest of 80c which I see as the upper end of a trading range.

See presentation slides: here.

Related post:
First REIT: Bumper distribution 3Q 2011.