Trading to put food on the table.

I read an article in today's Sunday Times by Goh Eng Yeow on how to sniff out good stocks to invest in. However, I am not going to blog about sniffing out potential winners in the stock market. I am going to blog about something that's probably less exciting: the day trader who wrote to him saying how he lost a big fortune in the stock market last year.

"With mounting bills, and zero financial reserve left, and no job, the current state of mind is like losing a wing man in Tom Cruise's Top Gun. Every day is a challenge mentally and physically to put food on the table..."

I know of friends who have lost big time in the stock market. Personally, I lost a six figure sum in the stock market before as well. It was definitely a nightmare and no one should have to suffer like this. So, can we avoid such an experience?

Well, the only way is probably not to invest in the stock market. As long as we are going to invest in the stock market, we are taking on risks. The idea is to reduce such risks as they cannot be removed.

I think a very pertinent question to ask before we take that first step as an "investor" or a "trader" is to ask ourselves if we are ready. By this, I do not just mean if we have the necessary knowledge required to do fundamental and technical analyses. I also refer to whether we have our safety nets in place. This is even more pertinent a question if we were to be a full time "investor" or "trader".

I know of people who dream of making it big as an "investor" or a "trader". Personally, I am not qualified in any way to say that their dreams are just dreams. Although I do not know of anyone on a personal basis who has become very rich investing or trading in the stock market, there could be people out there who have done so.

However, no matter what our aspirations, embarking on any journey without a contingency plan (or several contingency plans) is a terrible mistake. It would be like going on a sea journey on a ship without lifeboats. Would you do that?

I remember a fellow blogger telling me that if we are making a living from the stock market, we would need to have regular income from the market as frequently as possible. Otherwise, there would be no food on the table. To me, that sounds like having no contingency plan.

So, I replied that "If a person is making a living trading the stock market full time, I expect that he should have a sizeable capital. If he has very little capital and he depends on his gains from trading to put food on the table, a prudent thing to do is to find a salaried job."

If a person has a sizeable capital, he could put it to work investing in stocks which offer decent yields of 5 to 6% or S-REITs which could yield 10% per annum even at current prices. The dividends and income distributions would be a nice supplement to his earned income. Earned income? Yes, don't give up our jobs unless our passive income from the stock market is enough to replace our earned income.

Investing in the stock market need not be a high risk activity. It is only a high risk activity because individuals allow it to be so.

Individuals sometimes put their lives at risk with dreamy ideas of what the stock market is and what they could achieve. Dreams could then become nightmares.

Take it from me. I have been there before.

Related posts:
1. Seven steps to creating passive income from the stock market.
2. Create more passive income with limited capital.
3. How did AK71 overcome his losses and grow his portfolio?

OCBC Research: Industrial REITs.

I came across an interesting piece of research by OCBC on industrial REITs in Singapore and would like to share the salient points here (some of which I have mentioned before in my blog):

Industrial REITs reported healthy 4Q11 results.

Industrial REITs appeared to outperform market expectations.

Expecting stable performance.

Operating metrics still healthy.

Earnings likely to stay resilient.

Percentage of leases due for renewal at comfortable level.

Aggregate leverage may inch upwards after funding potential investments.

Industrial REITs in better financial position now

Maintain OVERWEIGHT view.

I am pleased to see that AIMS AMP Capital Industrial REIT, Sabana REIT, CIT and Cache Logistics Trust have all performed above consensus expectations as I am vested in all four. Bigger names such as Ascendas and Mapletree have only performed within expectations; not vested. (Refer to exhibit 3 in the report.)

See the full report: here.

Related post:
Office S-REITs VS. Industrial S-REITs (3).

Hock Lian Seng: 2c dividend per share.

On 17 October 2011, I looked at Hock Lian Seng's numbers after observing how insiders were buying up its shares at 23.5c a piece. I decided that its numbers were decent enough and that it would probably be able to pay a dividend of 1.5c a share.





I bought more shares at 24c a piece while waiting to see if price would fall closer to its NAV per share. Prices did go lower and touched a low of 21c in one later session but my buy order was not filled.

Today, it announced a dividend of 2.0c a share on the back of rather encouraging numbers. Mr. Market has reacted in the usual fashion and Hock Lian Seng's share price touched a high of 27c before closing at 26.5c today, up 1.5c from the preceding session.

I really like how its gross profit margin improved to 24.9% and its nett profit margin improved to 19.0%. Construction firms having thin margins is common knowledge amongst seasoned investors and being able to improve on their profit margins says something about the strength of Hock Lian Seng in the sector.





Of course, as investors, we own shares and we want to see if we are now in better shape on a per share basis. Well, EPS improved 15.1% to 6.1c. No doubt, this is one reason why a much higher dividend has been announced. 2c per share represents a payout ratio of 32.8%.

Hock Lian Seng will gun for more infrastructure projects in Singapore amidst greater spending by the government in this area. If they are successful in their endeavours, the company would be able to ride out the mild slowdown in the economy which is being forecast for the coming years.





See press release: here.

Related post:
Hock Lian Seng: Insider buying.

Yongnam: Smart money is accumulating.

OBV is used to detect distribution and accumulation activities. This, in itself, might not be very useful apart from providing material for a chit chat over tea. Looking at OBV together with price movement, however, could be rewarding.

A simple technical analysis suggests that smart money is accumulating shares of Yongnam.

Look at how the OBV has been gradually rising although its share price has been forming lower highs since early October 2010. An upward sloping OBV coupled with a weakening share price suggests that smart money is accumulating. Mind you, accumulation could go on for a long time as seen in this case.

However, there is support and buying on weakness could be rewarding as we could see prices going higher in time.

I have done some FA on Yongnam and its numbers have been improving over the years. Margins have been improving while gearing has been reducing.

Yongnam has carved a niche for itself in the construction industry and concentrates its efforts mainly in the infrastructure sector which continues to see major expenditure by regional governments.

What Yongnam does has a high barrier to entry and it is also probably the biggest in the game it plays. Yongnam seems to have an advantage and consistently gaining new contracts gives this claim credibility.

Visit Yongnam's website: here.

HY Markets.

Who are HY Markets?

“HY Markets is a division of the Henyep Group, a global diversified conglomerate with business in financial services, property, education, and charity spanning 3 continents and 20 countries worldwide. The Henyep Group of companies are registered and authorized in world-leading jurisdictions including London, United Arab Emirates, and Hong Kong. This provides clients with the comfort and security of a global institution.

"HY Markets provides investors with efficient and direct access to all their trading needs. Start trading with the security of an FSA regulated company."

                                                                                                                                (Source: HY Markets website)

There are many reasons why a trader should deal with HY Markets:

Henyep Group companies are authorized and regulated by world leading financial authorities providing clients with global access to capital markets. It has the following licenses: FSA, DFSA, SFC, HKEx. Moreover, Henyep has over 30 years of gold trading experience and is a member firm of Hong Kong's Chinese Gold and Silver Exchange Society.

I would like to highlight the most important points here:

1. It is regulated by FSA in UK.

2. It has total transparency and security of the world’s financial centers.

3. Of many advantages is that HY Markets has a long history. It has been serving investing community for more than 25 years.

To read up on their history, click here: Group History.

HY Markets is also famous for its multi trading platforms:

Offering both Revolutionary Web-based Trading and desktop platforms. Each platform has its advantages, for example: Web-based trading platform (which you do not need to download) could be accessed anywhere with Internet connection.

HY Markets has a complete product offering. It can meet all the trader needs. You can trade Forex, oil/gas, metals, commodities and stocks. In addition, you can buy long and sell short all the products. It has up to 400:1 leverage.

HY Markets has Personalized Customer Support. 24/7 customers are supported by phone, email or chart. They have experienced staff and help desk in local languages. Moreover, they offer VIP services.

HY Markets offers variety of trading tools:

For examples, it offers: daily economic calendar, currency conversion, Live Reuters news, glossary of terms and charts.

HY Markets offers a demo account.

In addition, they have a section on education with video tutorials. Where a beginner can learn trading basics: an introduction to margin trading and investing (margin trading basics, order types and understanding account information).

Furthermore, they provide traders with technical analysis. You may learn to use charts and statistics to make investment decisions: chart types, indicators and patterns, trend analysis.

Also, HY Markets gives fundamental analysis. The beginner can learn the ability to forecast market movements by analyzing: economic data announcements and news, macroeconomic factors.

It is always easy to stay updated with HY Markets. They provide traders with daily market commentary. Receive daily updates on all major capital markets and stay on top of your investment decisions!

Starting an account.

HY Markets has very easy opening procedure. You can start trading just with $50 in 5 minutes and you can fund account with credit card.

HY Markets offers variety of live accounts. They have MINI Account where you can start trading from $50 and up. It has up to 200:1 leverage. and 1/50 premium contract which is good for beginners.

You can choose STANDARD Account where the starting trading amount is $750 and up. It has up to 200:1 leverage, 1/10 premium contract.

HY Markets offers PREMIUM Account as well. You can start from $2,500. It offers up to 200:1 leverage, regular contract sizes.

Spreads at HY Markets start as low as 2 pips.

Finally, HY Markets offers CUSTOMISED and Islamic accounts to meet the demanding needs of all investors. Such service includes tailor-made accounts customized to individuals' needs, personal dealers, and dedicated account executives.

Visit HY Markets today: English language homepage.

Advertorial

A movie: John Carter.

From Academy Award®–winning filmmaker Andrew Stanton comes “John Carter” — a sweeping action-adventure set on the mysterious and exotic planet of Barsoom (Mars).

“John Carter” is based on a classic novel by Edgar Rice Burroughs, whose highly imaginative adventures served as inspiration for many filmmakers, both past and present.

The film tells the story of war-weary, former military captain John Carter (Taylor Kitsch), who is inexplicably transported to Mars where he becomes reluctantly embroiled in a conflict of epic proportions amongst the inhabitants of the planet, including Tars Tarkas (Willem Dafoe) and the captivating Princess Dejah Thoris (Lynn Collins).

In a world on the brink of collapse, Carter rediscovers his humanity when he realizes that the survival of Barsoom and its people rests in his hands.

Watch the trailers at Disney Studios Singapore: here.

AK71 gets recognition from the government!

Some time back, I wrote about how I was asked to take part in Eldershield. That blog post generated many good comments, putting forth arguments for and against me taking up Eldershield.

In the end, I decided to take up Eldershield because of an appeal by LP, the blog master of "Bully the Bear". He said "...  I wish to appeal to your sense of public charity - help contribute to the pool of money so that those poor elders can insure against this risk at lower premiums." That more or less made up my mind for me.

Today, as I was going through my mail, I came across one that had the words "ON GOVERNMENT SERVICE" together with our national crest on the envelope. I experienced palpitations.

A traffic offence? I flipped the envelope and saw the return address: "NSSC, 1, Depot Road, Singapore 109681." Wah! Being called up for reservist? Or did I forget to inform MINDEF that I would be going overseas before my last trip?

I opened the envelope and this was what I saw:

Paragraph 2 is of the greatest interest to me:

"In recognition of your contribution to National Service... you are entitled to an annual deduction of $1,500 from your taxable income... "

Of course, the letter also reminded me that I am ageing.

Related post:
Tea with AK71: Eldershield.

LMIR: 4Q 2011 results.

In recent weeks, I noticed that in some publications including The Business Times which compare high yielding stocks in Singapore, LMIR's distribution yield was overstated probably based on historical quarterly DPU. Historically, LMIR's quarterly DPU hovers at around 1c.

Recently acquired Pluit Village.

Personally, I estimated the DPU after acquisitions and rights issue to be closer to 3.26c per annum which works out to be 0.815c per quarter.

As a reader correctly pointed out not too long ago, the first DPU after the recent acquisitions and rights issue is likely to be lower because the acquisitions would have only been completed in December 2011. Indeed, DPU for 4Q 2011 (Oct to Dec 2011) is 0.53c, including contributions from recent acquisitions for the period of 6 December to 31 December 2011.

Income distribution is payable on 16 March.

Plaza Medan Fair.

This lower DPU likely disappointed Mr. Market as LMIR's unit price dipped from the start of the trading day, closing 1.5c lower at 39c but not before touching a low of 38.5c. If we were to annualise the quarterly DPU of 0.53c, it would mean an annual DPU of 2.12c or a distribution yield of only 5.3% based on a unit price of 40c. This would be a mistake, however.

Any investor with a longer term perspective should not worry as this much lower quarterly DPU is probably temporary. Over time, even my estimate of 3.26c in annual DPU should be surpassed, all else remaining equal.

Some numbers:

NAV/unit: 60c.
Gearing: 8.7%
Ave. cost of debt: 6.7% p.a.

See slides presentation: here.

So, should we rush to buy units of LMIR now? Not me. Why?

Although its unit price has declined from the ascribed fair value of 41c which sees a distribution yield of 7.95% with an estimated annual DPU of 3.26c, there could be more room to fall. This could happen once the REIT goes XD.

A doji was formed today as price closed lower. A doji suggests indecision and this could be due to the fact that the REIT is still trading CD. However, a gapping down is bearish. The very high volume on a down day reinforced the bearish picture.

The MACD has made a bearish crossover with the signal line which suggests that positive momentum has weakened. MFI and Stochastics are nowhere near oversold and we don't have a buy signal. If anything, the bearish divergence we spotted some time back is being played out now. The uptrend is broken.

It remains to be seen if immediate support at 38.5c as provided by the declining 100d MA would hold. If it should give, next support is at 37c which is where we find the upturning 50d MA.

Related post:
LMIR: A slow and steady climb.

STI breaks 3,000 points and stays above 3,000 points!

Although I am keeping to my pledge to spend more time with my family this year, I am also blogging less frequently because work got a bit more demanding.

I might have some spare time occassionally but instead of blogging, I just feel like spending time with a book or watching some movies on my iPad.

I know that some readers are lamenting the recent paucity of blog posts in ASSI and I apologise if I have disappointed.

Anyway, let's talk about my investments. I am now between 50% to 60% invested, closer to 50% is my estimate. With the bulk of my investment for passive income, I don't really have to do very much apart from looking at quarterly reports and receiving regular passive income.

On the real estate front, I am keeping an eye on developments as, after selling my properties last year, I am on a constant lookout for developments in good locations at fair prices.

3,011.68  Up 24.27

Enough of generalities. I put on my blogging cap this evening because the stock market rallied today and broke the 3,000 mark on high volume. The bull has legs and anyone who is still staying on the side with almost 100% in cash could be feeling quite despondent now.

Personally, I experimented with partially divesting some of my investments in REITs in the hope that prices would weaken upon XD to supports so that I could accumulate on weakness. This gambit has fared poorly, unfortunately for me.

AIMS AMP Capital Industrial REIT, the second largest investment in my portfolio, rocketed to an intraday high of $1.10 before closing at $1.085. Fundamentally, it is still undervalued although technically, $1.10 could be a resistance to watch. The next higher resistance is at $1.125 while support is at the former resistance of $1.025.

My original plan of buying on weakness at 97c or so has to be shelved for now.

Sabana REIT, the largest investment in my portfolio, has tested its recent high of 91.5c yet again. Immediate support is at 90c. See the higher lows formed since early August 2011 while price repeatedly tested the gap resistance and gap fill at 91c and 91.5c?

Could Sabana REIT break resistance and go higher as well? My original plan to purchase more units upon retracement to stronger supports starting at 87c is also being shelved for now.

What is most satisfying about today's rally for me is the long white candle formed on the back of much higher volume for CapitaMalls Asia. The downtrend is well and truly broken. An uptrend is firmly entrenched. Notice how volume has been increasing as price rose from the bottom formed in late December last year? This rally should be durable because volume has been increasing.

Using Fibonacci lines, we see that price closed today at where the 123.6% Fibo line approximates. This is likely a weak resistance and would crumble in time. Golden ratios are at $1.70, $1.75 and $1.795. With half of my investment in the stock at $1.45 and lower, I might take some profit off the table if these ratios should be tested.

30% of my investments are between $1.60 to $1.80. The balance are at $1.80+. These, I might divest to limit losses especially if things look toppish. For now, it looks like price could go higher in the near term. Good luck to one and all.

Related posts:
AIMS AMP Capital Industrial REIT: 3Q FY2012.
Sabana REIT: 4Q 2011 results.
CapitaMalls Asia: Net profit up 42.6%.

CapitaMalls Asia: Net profit up 42.6%.

In July last year, I put in a buy order for shares of CapitaMalls Asia because I felt its numbers showed it to be doing well but buying when its price was still firmly in a downtrend proved to be a mistake.

More than half a year later, fundamentally, things are still looking strong while technically, the downtrend has been broken, presenting a more promising picture.

I would be rather surprised if the low of $1.12 would be tested again. Why? Breaking out of the top of a base formation, it is more likely that we would see some support at $1.38 or so in the event of a pull back. Technically, we want to buy on retracements in an uptrend. Buying at supports could prove rewarding.

Some numbers:

Gearing level: 3.9%
NTA per share grew to $1.60
Final dividend of 1.5c per share proposed.

See slides presentation: here.

With more than 50 per cent of its China malls expected to be operational this year, the mall developer said 2012 will be "an inflection point".  Source: CNA. Read article: here.

Related post:
CapitaMalls Asia: Interim dividend declared.

Saizen REIT: 1H FY2012 DPU of 0.61c.

The strong JPY is a boon for Saizen REIT unitholders as it lifted distributable income in S$ terms as well as the NAV per unit.

A DPU of 0.61c has been declared for 1H FY2012 and is payable on 6 March 2012. At a unit price of 15c, this represents an annualised distribution yield of 8.1% which is not bad at all.

NAV per unit stands at 35c.

I continue to like the fact that Saizen REIT owns freehold residential properties in a country which sees a majority of its population renting the homes they stay in.

A continuing decline in rental reversions although small hints at a weak housing market and keeping the status quo, the only way DPU could grow is through cost cutting and a continuing appreciation of the JPY.

However, the management is unlikely to keep the status quo and Saizen REIT could potentially increase DPU through acquisitions using debt and internal resources. With a stronger balance sheet, it is capable of this.

Of course, we have to remember that, as of 31 December 2011, there were still 17 warrants yet to be exercised for every 100 units in issue. Once all the warrants are exercised, we have to expect a proportional drop in DPU, everything else remaining equal.

As of 31 December 2011, gearing stands at 31.33% taking into consideration cash on hand. Against the value of its investment properties alone, gearing would be 37.64%. With more warrants yet to be exercised, Saizen REIT could keep gearing level low and have the internal resources to fund a few more acquistions.

See announcement: here.

Related post:
Saizen REIT: Acquisitions and long term loans.

Economics 2012: Off the top of my head.

I have been doing more thinking. OK, so what's new?

In recent weeks, the stock markets rallied and with the strong closing on Wall Street last night, they look like they could move even higher next week.

The bulls say that the tide has turned and things are moving higher from here and that we should buy stocks on pull backs. The bears say that what we have seen recently is just a bear market rally from oversold positions and that stock markets will see new lows in time.

Both bulls and bears are looking into their crystal balls and coming up with reasons why they are going to be right. My own crystal ball is cloudy and I doubt it works at all.

However, drawing from what I have read in the news, it seems like the eurozone crisis is far from over. Banks in the eurozone are still trying to shore up their capital requirements and being significant lenders in Asia, accounting for some 20% of commercial loans here, negative ramifications could manifest themselves more remarkably in time. Being asked to write off huge chunks of Greek debt has made a difficult situation worse. Now, they are worried about Portugal.

Long-term interest rates of Euro countries, 1993-2011

The eurozone's unemployment rate has hit a new high and in Spain alone, unemployment stands at more than 22%. Recessionary pressure in Europe has already affected Asia as export volumes in China shrank. Smaller companies are experiencing problems with cashflow and a lack of credit. Countries here are all forecasting lower growth in 2012 with a possibility of even negative growth if the eurozone crisis should escalate.

Apparently, the ECB has been providing very low interest rate loans to eurozone banks in recent months. Instead of lending to businesses and individuals, however, the eurozone banks are parking the money in government bonds with higher interest rates. They would have to think twice about such a strategy. If they could be arm twisted into accepting a Greek debt haircut, it could happen with Portugal or even Spain and Italy, couldn't it?

The eurozone is a mess but it is an important part of the global economy. As a bloc, it is the largest trading partner for many countries here in Asia. Its problems are not its own as they will overspill and take on new forms in Asia.

Already, shipping firms are not going to do well due to excess capacity, anaemic demand and higher operating costs. I just learned that the anticipated pick up in demand from China after the holidays did not materialise and this is a cause for worry. Firms which are heavily leveraged could even go into bankruptcy if credit dries up.

Property developers are not going to do well due to government intervention in efforts to subdue runaway prices. This has both social and political considerations as well, of course. In China, the government has expressed its desire to keep measures in place as it feels that home prices should fall another 30% or so. Many investors in various guises will feel the pain and some might even die from it.

Banks have been under pressure as the very low interest rate environment affects their earnings while deteriorating macro economics could see a slow down in demand for banking services in their various forms. Already, investment banking has seen massive retrenchment exercises and it does not look like it is going to stop.

Fundamentally, I find it hard to be optimistic about 2012. Technically, I feel that the stock market could see a test of its lows once more before moving higher. I know I am sticking my neck out and putting it on a chopping block here but it is just how I feel right now.

In case you are wondering, I still believe in being pragmatic and not being bearish or bullish. Hence, although I have been divesting as the stock market rallied, I remain more than 50% invested. Yes, I still believe that 50% is a good number in such uncertain times.

People who have exited the market and are 100% in cash will see their wealth being eroded in time by higher inflation. The longer it drags on, the more detrimental it is going to be. As a prominent banker once said, it is very expensive to be in cash these days.

People who are almost fully invested in the market are shouldering a heavy risk premium too. If things should take an abrupt and powerful turn for the worse, they could lose much of their wealth in a very short time. They would also lack the resources to buy stocks on the cheap.

In the weeks prior to the current market rally, I accumulated various stocks at lower prices including the purchase of LMIR nil paid rights. As prices rose, I divested either wholely or partially to lock in gains.

As prices rose higher, I even cut some losses on some badly timed purchases months ago. As you can imagine, I have been recovering quite a bit of money from the stock market.

So, do I think this is a time to sell and not to buy? Nothing like that. I simply think it is a time to go back to being 50% invested. Since I was more than 70% invested after all the buying I did in the weeks leading to the current market rally, the thing for me to do was to sell. I might sell more next week if prices go higher.

On hindsight, which is always perfect, I started selling a bit too soon. Quite a few counters saw higher prices after I sold at what I thought were strong resistance levels. Do I chase and buy back? Nope. Why?

Buying as prices go higher is similar to selling as prices go lower. I don't do it. I buy at supports and sell at resistance. It is not a perfect strategy, surely, as supports and resistance could give way. However, going against this strategy has proven more damaging than beneficial most of the time. This is true for me, at least.

Now, with my war chest fuller, what do I intend to do? As usual, look ahead and wait for opportunities to buy again at supports. Patience is a virtue and mostly a rewarding one too.

Related posts:
Refer to right sidebar and look for the heading "Stock Market Strategies".

Win cash, prizes and a trip to the USA!

Watch videos made by tech fanatics, vote for your favourites and you could win cash, prizes and a trip to the USA!

Watch the videos and cast your vote here:
http://sg.churpchurp.com/AK71SG/share/cantlivewithouttech3

Win a trip to Krabi!

Do you want to win a trip for 2 to Krabi worth S$5,000?

You might just win if you take part in a simple contest organised by DUREX in conjunction with Valentine's Day:

Durex Love Box Pose and Post Photo Contest.

Find out how to participate here:
http://sg.churpchurp.com/AK71SG/share/durex

Courage Marine: Chance to cut loss.

With the BDI sinking amidst a worsening situation of overcapacity and economic malaise in Europe, the rally in Courage Marine's share price provided a chance for me to cut my long exposure with minimal losses.

We are also blessed to have an industry insider, Jason, amongst the regular readers of ASSI and if the evidence provided is anything to go by, the bleak situation for bulk carriers looks set to worsen.

Low: 662.

Although Courage Marine entered the worsening state of affairs from a position of strength, it is unlikely to do better than the preceding year. In fact, for some, its very survival is in question.

With today's white candle formed on the back of higher volume, could we not see price going higher? We could, of course. 11c or even 12c could be tested next if the bullishness continues. I am already in the queue to sell.

Related post:
Courage Marine: BDI plunging.

NOL: Cutting losses on a strong rebound.

Months ago, I made an ill fated decision to go long in NOL. It was a decision based purely on TA and it was a trade that went awry. Straying from my tried and tested methodology of FA + TA plus a lack of a cut loss price has resulted in holding on to paper losses. I should perhaps stick to what I know best.

In more recent times, I traded shares of NOL and made some money. I bought as its price went to a low of sub $1.00 but by $1.22, I had divested. The strength with which its share price broke out of what seems to be a range has taken me by surprise although there were signs that price could have found a floor, if not the bottom.

Even so, the entire upmove in the broader market has taken much more seasoned investors by surprise. Just when we thought the market would be range bound and moving sideways for months to come, Mr. Market decided to shock us.

So, am I euphoric and think that everything is fine now and that prices will recover to what they were a year ago? I am not perfect but I am perfectly aware that, fundamentally, we are not out of the woods. Shipping industry will face a chronic situation of oversupply and weakening demand this year and possibly the next. Higher bunkering fees do not help.

Technically, I see immediate resistance at $1.45 or so and I am using this rebound to cut some losses. If $1.45 should be taken out cleanly and if the bullishness persists, a stronger resistance is at $1.55.

Related post:
NOL: Is the worst over?

A musical: Girl Talk.

The last time I watched a musical was years ago. I think it was Phantom of the Opera. Well, now, there is a new musical coming to town, Girl Talk!

Girl Talk follows three radio DJs: the eccentric Barbara, the rambunctious sexpert Dr. Laura and "Little Miss Perfect" Janice. Listen in on subjects such as sex, food, alcohol, babies and men!

With the original cast from Broadway, dance along to your favourite party tunes from Jennifer Lopez to Aretha Franklin.

Dates: 21 Feb - 4 Mar 2012
Location: Jubilee Hall, Raffles Hotel

Want to get a 15% discount off the price of tickets?
Click on this link to find out how:
http://sg.churpchurp.com/AK71SG/share/girltalk

LMIR: A slow and steady climb.

LMIR's unit price has been slowly and steadily climbing higher and this is netting me some handsome capital gains on the rights units from nil paid rights purchased not too long ago.

Remember I mentioned that LMIR was too cheap to sell? I still think it is too cheap to sell but it is approaching the fair value of 41c which I ascribed it back then. Technically, it is now also closing in on the next resistance level at 39.5c. 

If it should break 39.5c convincingly, we could see resistance provided by the declining 20wMA at 41c tested next. 41c coincides with the fair value I have ascribed to the REIT's unit price and I expect strong selling pressure if it should be tested.

I have done another partial divestment today at 39c, one bid away from the immediate resistance of 39.5c, taking some gains off the table. With this partial divestment, I now retain only a fifth of all the rights units from nil paid rights I purchased in its rights issue.

Why not wait for 41c? There is no way we can be sure that 41c will be tested and I am beginning to see some signs of possible weakness in the form of lower highs on the MFI and Stochastics with unit price pushing higher. The lower high on the MFI suggests weaker demand with price going higher.

On the weekly chart, the MACD has completed a positive crossover with the signal line but it is still in negative territory. Although MFI and Stochastics' gradual rise from their oversold territories suggest that there is some support for the REIT's unit price, we could see some price weakness in the coming weeks.

Accumulating when longer term supports are tested would be a good strategy. On the weekly chart, I see 36c as a technically attractive price to add to long positions.

Related posts:
LMIR: Partial divestment at 38c.
LMIR: Too cheap to sell.

AIMS AMP Capital Industrial REIT: At $1.02 resistance.

On 19 January, I mentioned that if sentiments remain bullish, we could possibly see resistance at $1.02 for the REIT's unit price tested. My overnight sell orders at $1.015 and $1.02 were filled today.

Could the REIT's unit price push higher? It could but anyone thinking of buying into the REIT now might want to bear in mind that the REIT goes XD on 3 February and we could possibly see the REIT's unit price weakening then. Risk premium for going long is much higher now.

Momentum oscillators like the RSI and the Stochastics show the REIT to be very overbought and for a rather prolonged period by now. Only the MFI is not overbought.

The MFI takes into consideration price and volume and shows demand compared to the RSI. However, the MFI being where it is now is also the result of relatively low trading volumes.

Volume is the fuel that drives rallies. So, without volume, we could see the rally fizzle out in time.

Related posts:
AIMS AMP Capital Industrial REIT: Partial divestment.
AIMS AMP Capital Industrial REIT: 3Q FY2012.

First REIT: Partial divestment at 76.5c.

First REIT never did test 80c after it went CD. The highest it touched was 78.5c. This morning, after it went XD, its unit price declined to a low of 76c.

I made a decision to divest units which I accumulated at 76.5c and 77c earlier last month in January. I managed to sell at 76.5c as 77c could once again assert itself as the immediate resistance.

Overall, I still make a gain as I would collect a DPU of 1.93c payable on 29 February on these divested units. Therefore, it has turned out rather decently as a trade.

When would I again add to my remaining long position in the REIT? I see stronger supports at 75c and 74.5c. Could we see them tested in the next two months? Your guess is as good as mine.

Related post:
First REIT: FY2011 results.

Cambridge Industrial Trust: 4Q FY2011.

Unit price of Cambridge Industrial Trust has been creeping upwards, probably in anticipation of the Trust going CD.

Total assets under management exceed $1b with recent revaluation of properties. This resulted in a lower gearing level apart from boosting NTA/unit to 62c. Year on year, gearing ratio has fallen from 34.7% to 33.1%. The REIT has no borrowings due until June 2014.

Interest cover ratio: 5.0x
Average land lease remaining: 36 years.

DPU increased quarter on quarter from 1.082c to 1.118c, representing an increase of 3.33%. Annualised, the distribution yield at 50c per unit is 8.94%.

The REIT will go XD on 6 February and the income distribution is payable on 29 February.

See presentation slides: here.

On 14 October 2011, I said that Cambridge Industrial Trust could be worth another look. That view has not changed.

See blog post here:
Cambridge Industrial Trust: Worth another look.

Related post:
Cambridge Industrial Trust: Templeton and acquisition.

Sabana REIT: Target BUY prices.

A reader mentioned that Sabana REIT's unit price has weakened to 88c after going XD. A further weakening in price could be an opportunity to accumulate. I have the same thought. After all, I divested a small portion of my investment in the REIT at 90c and 91c as its unit price rose in the last couple of weeks.

Question: What would be my target buy prices? Prices? Yes, I see stronger supports at 87c, 86c, 85c and 84.5c. So, I could possibly accumulate at these prices if they should be tested for support.

In a recent blog post, I said that Sabana REIT could possibly see a higher DPU in the next quarter. So, accumulating on weakness could be a very rewarding exercise. See blog post: here.

I would also pay attention to the momentum oscillators to see if the REIT is oversold at any point in time. Good luck to all of us.

Related post:
Sabana REIT: Partial divestment at 91c.

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.