Charts in brief: 9 April 10.

CapitaMalls Asia: The reversal signal was confirmed today on moderately higher volume as a white candle was formed.  Significantly, price closed above resistance provided by the 20dMA for the first time since 23 March.  The MACD has made contact with the signal line and looks set for a bullish crossover.  Stochastics has formed a higher low as it emerged from the oversold region.  A retest of $2.41 is most likely in the event of a continuing upmove in price.

Golden Agriculture:  Mixed signals seen.  Sell signal confirmed on the MACD on a white candle day as price closed higher at 61c, forming a white spinning top in the process.  The MFI has formed a higher low but note that volume is lower today, an up day, compared to the last two days which were down days.  In TA, we work on probabilities based on the weight of the evidence. This is one of those occasions where I cannot tell if the chances are higher for further upside or a correction downwards.

Saizen REIT: After a short bout of profit taking yesterday, Saizen REIT formed a dragonfly doji today on higher volume as price closed at 17.5c.  MFI continues rising as the sell signal seen on the MACD yesterday was negated.

Healthway Medical: Price broke resistance today and touched a high of 17.5c before closing at 17c, the resistance provided by the declining 20dMA.  Volume expanded and it seems that the MACD might do a bullish crossover with the signal line.  MFI has formed a higher low, suggesting a return of buying momentum. OBV has turned up.  All these are providing hopeful signals to people who remain bullish on Healthway Medical in the short run.  Another chance to sell at 18.5c, perhaps?

SPH: Another white candle day for SPH as it closed at $3.97, just three cents short of the target I have for it at $4.00.  The MACD is tearing away upwards from the signal line.  Very bullish. OBV is rising steeply, suggesting ongoing accumulation.  The MFI has moved into overbought territory but the momentum suggests that $4.00 is almost a foregone conclusion.  After, $4.00?  I see $4.20 as the next resistance.

Courage Marine:  The price closed at 22.5c today, a high achieved on 29 March.  A white candle day on the back of increased volume is reassuring for bulls. OBV has turned up and the MACD is moving higher up away from the signal line.  The technicals suggest further upside and my eventual target remains at 27c, the high achieved on 28 Sep 09.  Gap resistance at 23.5c will have to be overcome first in such an instance.

AusGroup: In my last TA, I said that "the MFI has formed a higher low. This suggests that buying momentum is still strong. OBV suggests that there is no distribution yet. AusGroup might try to push higher again but things are looking dicey".  AusGroup closed at 65.5c today and looks like it might push higher.  Congratulations to those vested.


Related post:
Charts in brief: 8 April 10.

Dry bulk carriers: Jason shares.

A reader, Jason, has provided, in my opinion, a wealth of information on dry bulk carriers and what we should be concerned about in the next few years.  I would like to highlight Jason's comments here in a proper post:

"...there are monthly publications that cover dry bulk extensively. You can try shipping.capitallink.com - links to lots of shipping information, ship indexes and its weekly newsletter has got plenty of information also on dry bulk shipping.......



"Just so i give you an idea of what dry bulk shipping is all about category of ships:

"VLOCs (very large ore carriers) - primarily used to carry iron ore, Vale will become the owner of the largest VLOC fleet in the world.


"Purpose is to get economies of scales to move iron ore from Brazil to China, compete against BHP/Rio who are much nearer vis-a-vis Australia.


"Capesizes: Moving mostly the hard dry bulk cargoes viz iron ore + coal (usually 120,000 dwt to 220,000 dwt range)


"Panamax: moves coal/iron ore/grains (70,000 dwt to 120,000 dwt)


"Handysizes/Handymax/Supramax: moves everything under the sun - offers the greatest flexibility due to their size, can stop at any port of call to unload (5,000dwt to 69,000dwt)


"To gauge charter rates, you have to look at their respective indexes : BCI (baltic capesize index), BPI (panamax index), BHI (handy index)......charter rates for panamaxes have overtaken capesizes! This was driven by the grains markets - 5 biggest producers being USA, South America (Argentina/brazil), Russia, Europe, Australia.


"Right now, fleets are looking to Asia for business - China (iron ore + coal), India (coal), Japan (iron ore, coal), Korea (coal, iron ore) why? Cos Asia houses some of the biggest steel producers in the world! China - Baosteel/Shagang/many more. India - Arcelor Mittal. Japan - Nippon Steel. Korea - POSCO


"Right now,USA gets its iron ore from backyard (domestic + Canada). Europe still imports from Australia/Brazil but not much cos their economy is still in the toilet for now.


"Coal is very much part of the steel production (used in the blast furnaces) and power plants, of which India especially is lacking in the latter while China needs the former! Why the boom in China? Biggest car mkt in the world (13.6m cars in 2009), property boom, infrastructure spending from new stimulus package in 2010.


"So ships will be everywhere but mostly with an eye for Asia. China is gobbling up every known commodity on earth - copper/aluminium/zinc etc, wheat, cotton....rates keep going cos charterers pay more to get ships out from the far east to Europe/baltic/atlantic.


"So long as Courage Marine can focus its biz on China/Asia/India exclusively, the upside is there. And we all know doing biz in China is all about guan xi......:) Keep that guan xi and you are OK.


"As for the progressive new ships coming on board, the ship owners will suffer the most whilst the charterers will be laughing to the bank - i can pick and choose my shipper!"

In my reply, I suggested that the demand for dry bulk carriers is likely to remain strong in Asia but as Jason pertinently pointed out, the world of dry bulk carriers would be focusing on Asia to pick up the excess capacity and with new ships joining the fray in the coming years, a lid might be put on earnings with increased competition. 

Based on my analysis of Courage Marine's numbers, with their strict cost management and very low gearing, I believe that they will be able to do relatively well.  If revenue reduces and costs stay low, we can weather storms.  If revenue reduces and costs are high, we are most likely on a sinking ship.

Courage Marine is also very focused in offering their services in the Greater China region where growth is the strongest in the world.  Since 2001, Courage Marine has built a good name for itself in this region.  It is small but nimble. As long as Asia continues to do well, Courage Marine would be a key beneficiary.

A China Bubble? People Have Been Saying That Forever
Posted Apr 08, 2010 09:46am EDT by Henry Blodget



Related post:
Courage Marine: Riding the waves of recovery.

Charts in brief: 8 April 10.

CapitaMalls Asia: A doji, another reversal signal, was formed today with price closing at $2.29 with the lowest volume in weeks.  A reversal signal again?  Dare I hope?

Golden Agriculture:  Yesterday, I said that with "both the MFI and OBV turning down, which suggest reduced buying momentum and the presence of some distribution, the black spinning top possibly signals a reversal".  The counter went to touch a low of 59c today before closing at 60c.  MFI and OBV continue to decline and we see a sell signal on the MACD. If we look at the chart, the 20dMA has not been very reliable as a support in past instances.  I would look to the 50dMA instead this time for a strong support.  It is currently at 55c.

Saizen REIT: A black candle day as price closed at 17c on lower volume.  Likely short term profit taking.  It is quite clear from the chart that 17c was a resistance level since 22 Jan 10.  We need confirmation in the next few sessions to see if 17c is resistance turned support.  If it is, chances are that price action would be forming a new base at 17c before moving higher.  Such is the slow motion rise of Saizen REIT but the longer term MAs are rising and there is no question that the longer term uptrend is intact.

Healthway Medical: Another gravestone doji as price closed unchanged at 16.5c.  This is somewhat impressive but with the 20dMA and 50dMA both completing their downturns, a move downwards to critical support at 16c looks most likely in the near term.  The MFI has also formed a lower high and this suggests that buying momentum is definitely weakening.

SPH: Reversal signal was negated as SPH formed a nice and long wickless white candle, closing at $3.94.  OBV is rising strongly as accumulation carries on.  MFI has flattened and is not overbought.  A push towards $4.00 is now looking very likely.

AusGroup: Touched a high of 64c on respectable volume but closed at 62c.  This candlestick is very bearish.  63c remains the immediate resistance.  On top of this, the MACD has a sell signal.  However, the MFI has formed a higher low.  This suggests that buying momentum is still strong.  OBV suggests that there is no distribution yet.  AusGroup might try to push higher again but things are looking dicey.

Oceanus: Sell signal confirmed today on the MACD.  Price closed at 36.5c which is support provided by the 100dMA.  We will need confirmation whether this is the new support level.  If it breaks, next support is at 35c.

Genting SP: Volume shrank as price closed at 89.5c.  It would be interesting to see if it continues basing at this level or moves to test the recent low of 83.5c in time.  With MFI and Stochastics near oversold regions, I do not expect any drastic downward movement in price if news stay benign.

China Hongxing: No follow through from yesterday as price formed a black candle, resisted by the declining 50dMA.  Immediate support remains at 15c.  Fundamentally, the company has many challenges and made some bad decisions last year.  The slightest positive newsflow in such a situation might have a strong positive impact on the share price.

Some readers asked if I am vested in all the counters I cover.  I'm not.  I am not vested in the last four counters here, for example.  I do the TA for these for various other reasons.  If you happen to be vested in these counters, I hope the TA is useful to you.

Related post:
Charts in brief: 7 April 2010.

To Raelynn and Jason.

Dear Raelynn and Jason,

For some strange reason, Blogger has been acting up and some of the comments in my blog have mysteriously vanished.  I have checked with the blogmaster of Bully the Bear and it happened to him too.

Today, I received three comments for moderation but upon clicking, there were only two comments.  One went missing.  The two remaining comments are from the two of you.  To the writer of the missing comment, you might want to send in your comment again.

I clicked to publish your comments and it seems they have now gone missing.  So, I am posting in my blog to let you and other readers know that we have a problem with disappearing comments right now with Blogger.  I hope it gets resolved soon.

Raelynn,

Learning FA and TA takes time.  I am still learning and that's the honest truth.  :)  It is something that you and your partner can do together.  It's more enjoyable to have someone close to share the learning process. 

You are also right about how FA for REITs and FA for companies would look at different things.  In my reply to Jason below, you will see how I have overlooked an aspect in my analysis of Courage Marine as shipping is an industry I am new to.

As for CapitaMalls Asia, its parent is Capitaland.  We can say that CapitaMalls Asia is the parent of CapitaMalls Trust and CapitaRetail China, I suppose, or maybe it could be more accurately referred to as their sponsor?

That's all I can remember from your comment.  If I have missed anything out, please let me know.

Jason,

Yes, you are right about what is lacking in my research on Courage Marine.  I have considered current capacity and I have considered how the excess capacity has to be soaked up first and that shipping companies would not at this point in time place order for new ships but I have neglected the additional capacity that might be coming on line. 

Shipping is a new industry for me. Please, do share with us the information you have from your occupational hazard.  Much obliged.  :)

Charts in brief: 7 April 2010.

CapitaMalls Asia: Closed unchanged at $2.28 after touching a high of $2.31, forming an inverted black hammer, which, by the way, is another possible reversal signal.  We have been getting many of these reversal signals and none has followed through thus far. MFI has turned down but OBV is flat.  Overall, the suggestion is that the price has found support and is currently going through a basing process.

Golden Agriculture: First black candle in many days and a spinning top at that.  With both the MFI and OBV turning down, which suggest reduced buying momentum and the presence of some distribution, the black spinning top possibly signals a reversal.  Channel resistance is at 64c but will the price move to test this before the week is up? It could happen but, technically, it is obvious that weakness is setting in.

Saizen REIT: Volume has expanded for four days in a row with price closing at 17.5c, forming a wickless white candle, today.  The MFI has surpassed the previous high and is nowhere near overbought.  The buying momentum could strengthen.  OBV has risen sharply, suggesting heightened accumulation.  The MACD continues pulling away from the signal line on the upside, which is bullish.  The declining 50dMA has now turned up, joining the 20d, 100d and 200d MAs in cutting out ascending paths.  The Bollinger bands are just beginning to widen. A move to test the previous high at 18c seems close at hand.

Healthway Medical: Despite a rising MFI, suggesting some positive buying momentum, price action formed a gravestone doji today. Even more ominous, we see the 20dMA beginning to turn down.  MACD is moving closer towards zero.  Unless some heavy volume buy ups happen in the next two or three weeks, the 20dMA seems destined to form a dead cross with the 50dMA and the MACD would be in negative territory.  Support remains at 16c and if this breaks, we should see stronger support at 15c.

SPH: Slight reduction in volume today as the MFI turned down.  OBV is still rising as accumulation continues unabated.  However, the white spinning top formed today suggests indecision.  If this is confirmed as a reversal signal, the journey towards $4.00 would be aborted and $3.82 is the immediate support.

AusGroup:  It seems that 63c remains insurmountable for now.  Price formed a doji, closing at 62c, today.  Although MFI has formed a new high, volume has reduced slightly over a three day period.  There is still a chance of 63c being taken out but volume has to expand on renewed buying ineterest for this to happen.  If volume dwindles, a downward move towards support at 60c is more likely.

Oceanus:  Touched a high of 38c but closing at 37c, price formed a gravestone doji today.  We have a sell signal on the MACD.  Immediate support at 36.5c.  This is where we find the flat 100dMA.  Stronger support is to be found at 35c, where we see a confluence of the 20d, 50d and 200d MAs. Recap: Oceanus.

Genting SP: Touched a high of 92.5c but was resisted by the 20dMA and closed at 90c. Genting SP has emerged from its downtrend in mid March and is now moving sideways. The stochastics and MFI are both near oversold territories.  Price seems to have found support for now and further weakness is expected to be mild if news remain benign. Recap: Genting SP: Obvious downtrend.

China Hongxing: This counter broke out today unexpectedly on high volume, touching a high of 16.5c, it closed at 16c, resisted by the declining 50dMA.  If it manages to close above 16c in the next session, the upside targets are at 18c (100dMA) and 19c (200dMA).  Immediate support is provided by the upturning 20dMA at 15c.  Breaking 16c convincingly would most probably see punters coming in to push it higher towards 18c. Recap: China Hongxing: Downside target?

AIMS AMP Capital Industrial REIT:  Price opened and closed at 22c today, forming a dragonfly doji.  This is the first time it has happened since end January 2010.  We also see a buy signal on the MACD.  OBV is up.  MFI is up.  The Bollinger bands look to be on the verge of widening and if that follows through, this counter is probably going to test the top of the base formation at 23c although, from a chart pattern perspective (where I look out for symmetry), it seems a tad early.  Indeed, the low volume seen today adds an element of caution. Recap: Charts in brief: 19 Mar 10.

LMIR: This counter has to close above a bunching of MAs which are supports turned resistance.  If price could close firmly above 49c in the next few sessions, this objective woud have been achieved.  MFI is rising towards 50%.  Stochastics is rising from the oversold region.  The rising 200dMA is at 47c and should provide support in the event of further weakness. Fundamentals remain strong and I would accumulate on weakness.  Recap: LMIR: More units at 10% yield.

Related post:
Charts in brief: 6 April 2010.

Comments on the US economy.

Yes, It's a V-Shaped Recovery: Risk of Double-Dip "Relatively Low", Liz Ann Sonders Says.
Posted Apr 05, 2010 10:05am EDT by Aaron Task



"I'm amazed people still say it's not a 'V'-shaped recovery, which to means they're simply not looking at the charts," says Charles Schwab's chief investment strategist.

Bear Market in Bonds Could Trigger "Melt-Up" in Stocks, Sonders Says.
Posted Apr 05, 2010 11:50am EDT by Peter Gorenstein

 

 
The Dow Jones Industrial Average is on the verge of 11,000 for the first time in 18 months on the back of Friday's positive jobs report and Monday's better-than-expected reports on pending home sales and ISM services, a private trade group measure of the U.S. service sector.

Charts in brief: 6 April 2010.

CapitaMalls Asia: No follow through on the reversal signals seen in earlier sessions.  This is becoming a habit for this counter. The ugly black candle formed today is on the back of lower volume and the price closed at the support provided by the 50dMA at $2.28. MFI and OBV have gone flat in the meantime.  This counter is likely to trade sideways for a while if such conditions persist. Such a consolidation period took about a month to play out from late January to late February.

Golden Agriculture: MFI and OBV continue to rise.  Positive momentum and accumulation are very much the order of the day.   Trendline resistance is at 63.5c.  If this breaks on much increased volume, price action could go parabolic like what happened in early January this year.  If this holds, a retreat to the channel support is likely.

Saizen REIT: Some sceptics I know are now convinced that Saizen REIT is a buy based on its compelling valuation. Today, Saizen REIT traded at one price and one price only, 17c.  At 9.35AM, the entire sell queue of 1,237 lots at 17c was snapped up in a single transaction.  A friend who stubbornly refused to buy any at 16.5c and was waiting at 16c for weeks has missed his chance, it would seem.  Saizen REIT's longer term uptrend is intact.  The rising 100dMA is now at 16c and the rising 200dMA is at 15c.  The MACD is beginning to pull away from the signal line on the upside and we might be witnessing the beginning of more upside to come but given Saizen REIT's slow motion rise so far, I wouldn't hold my breath.  However, I believe patience will be rewarded.

Healthway Medical: Traders are getting tired of waiting for this counter's price to move up. The excitement that surrounded the news of plans to grow the business in China and the buy calls by DMG and Partners has become a distant echo. Many have thrown up their hands in despair. Today, we see the OBV going through an obvious decline, the first since 25 March. The fact that this happened as MFI turned up is somewhat ominous. Price touched a low of 16c and closed at 16.5c on much higher volume compared to the last session. The MACD continues to approach zero and more near term weakness is likely. I will wait and see if the support at 16c holds up.

SPH: OBV is rising sharply, suggesting strong accumulation. MFI, although not overbought yet, is tapering off, suggesting that buying momentum is mellowing a bit. I maintain an eventual target of $4.00 which would probably be hit once price is able to close above $3.90 convincingly.

AusGroup: Not being able to close above resistance provided by the merged 100d and 200d MAs at 63c, price retreated to 61.5, a resistance turned support. Whether 61.5c could hold up as support will need confirmation. Good news? The pullback happened on lower volume than the buy up yesterday. If 61.5c breaks, immediate support is at 60c. Recap: Ausgroup: An update.

Related post: Charts in brief: 5 April 2010.

Charts in brief: 5 April 2010.

CapitaMalls Asia: Buy signal confirmed on the MACD. OBV continues to rise, signalling accumulation.  MFI rose, signalling a return of buying momentum. Stochastics has turned up from the oversold region.  Price action formed a black spinning top with price closing at $2.31, still resisted by the 20dMA.  Volume remains anaemic and needs to expand to have a meaningful move up in price. Recap: CapitaMalls Asia: A late reversal?

Golden Agriculture:  Volume expanded as price pushed higher but it formed a bearish inverted hammer as price closed at 61c after hitting a high of 62c.  In the event of a pullback, it would be interesting to see if 60c could be a strong support.  Expectation is that it is early days yet for it to be so.  Expect strong support at 57.5c, a many times tested candlestick resistance and 50% Fibo line.
Recap: Golden Agriculture: Further divestment at 60c.

Saizen REIT: A nice bump up in price, closing at 17c and forming a dragonfly doji. This is the first time since 21 January that Saizen REIT has closed at 17c or higher.  All the momentum oscillators are rising and it might not be too much to hope that Saizen REIT would be moving higher sooner than later. Recap: Saizen REIT: 1627 lots bought up.

Healthway Medical:  A couple of readers asked me if I am still vested in Healthway as I have gone quiet on the counter.  I still have a smallish position in the company and I still look at its charts daily but there is nothing much to say.  The uptrend has clearly stalled and the counter is currently consolidating.  The 20dMA at 17c is now the new resistance and immediate support is at 16c, which is provided by the 50dMA.  The MACD continues to fall but the OBV is flat.  This suggests that buying momentum is weak but there is no obvious distribution.  So, I don't expect the price to crash but the consolidation could go on for a while. Recap: Healthway Medical: Touched 16c.

SPH: Closed at $3.88, high of the day, an obvious breakout from the very long term resistance at $3.82.  $3.82 was a support level that was breached in July 2008 and finally gave way in September 2008.  This is the first time since then that SPH has closed above $3.82.  It has been 18 months!  We will need confirmation that $3.82 is now resistance turned support.  Eventual target is S$4.00 in such a case.

Credit Suisse on the Japanese economy and JPY.

Credit Suisse thinks that the Japanese economy will continue to improve for the rest of 2010 and that the Yen will strengthen.  Is this also a reason why Credit Suisse is now a substantial unitholder of Saizen REIT?  I wonder.

31 March 2010
Bloomberg



Related post:
A tale of two reversals and Saizen REIT.

Foreigners' views on Japanese real estate.

These are some clips I found on YouTube which show recent perspectives of foreigners on Japanese real estate.  It is gratifying to see how they feel that the prices of Japanese real estate are reasonable and that there are great opportunities to be found in a real estate market that has suffered deflation for 20 years.  Marc Faber isn't the only contrarian in the world, after all.

07 Dec 2009
Someone from Perth bought a house in Japan and thought it a bargain.



21 Dec 2009
A video clip from Jones Lang Lasalle in Japan on Corporate Real Estate (CRE)  and how the returns in Japan can be big and is something to think about.



01 April 2010
This one is really interesting.  A group of English teachers in Japan are developing residential real estate in the country and are trying to get more foreigners to invest in Japanese real estate saying that "it is a very satisfying investment area".



Related posts:
Buy Japanese real estate.
Saizen REIT: A symmetrical triangle.
Saizen REIT: March 2010 presentation.