Charts: China Minzhong, Wilmar, Yongnam, Sabana REIT, AIMS AMP Capital Industrial REIT.

I have a friend who told me that he wants to buy more of China Minzhong at 50c. Why 50c? He can't quite say. Anyway, at 50c, I would have lost almost half of my initial investment in the company...

What does the chart say? Momentum is definitely negative and the MACD is still in decline. What is encouraging is the reducing volume over the last three sessions although it remains elevated. Today, a white spinning top was formed. Could this be a reversal signal?

Well. the OBV is still in decline which suggests distribution is ongoing even as price weakened. The MFI though seems to be forming a higher low.

The MFI takes into consideration both volume and price and is often seen as a measurement of demand momentum. So, it is telling us that there is some demand coming back as the stock was savagely sold down. A rebound could be on the horizon and we could see gap closing at 68.5c in such an instance.

Wilmar's technicals have nothing encouraging for the bulls apart for the formation of a black hammer today.

This reversal signal would need confirmation in the next session but with the other technicals very bearish, it would be a nice surprise if a reversal does happen.

Yongnam has been sold down. It touched 22c today, a level not seen since August last year.

I have looked through Yongnam's numbers and they actually still look quite good. However, the lower highs on the MFI are obvious and buying momentum is absent. So, price could drift lower which could see it testing the low of 21.5c hit last August.

Although there has been some distribution going on as suggested by a mildly declining OBV, most shareholders are just holding on. Look at the volume. Look at where the OBV was last August and where is it now. Although price has reached the low levels of last August, OBV is at a much higher level.

To me, the price weakness of recent sessions is nothing alarming. It is not a result of rampant selling. It is just that without buyers share price could continue to drift lower.

I know quite a few people are looking to possibly adding more units of Sabana REIT to their portfolios.

MACD has crossed into negative territory. MFI, a measure of demand hit 50% and turned down. The OBV suggests that distribution is ongoing. The very high volume today formed a black hammer. The high volume suggests a heightened state of activity and the black hammer suggests that bears had the upperhand. Further weakness could see supports at 93c (100dMA) and possibly 90.5c (200dMA) tested.

AIMS AMP Capital Industrial REIT's chart is similar to Sabana REIT's but uglier.

The MACD has plunged headlong into negative territory while the MFI went into oversold territory. Very bearish. The OBV suggests that strong distribution activity is ongoing. Indeed, look at the trading volume spiking today. Immediate support is at $1.08 and if that goes, we could see $1.035 tested.

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Old Chang Kee: Holey curry puff.

Asked my colleague to help me buy a curry puff from Old Chang Kee earlier as I didn't want to leave the office. Weather is too warm!

No, I didn't take a bite before I took these photos. You can tell that the exposed egg white and potato chunks are rather burnt. This is a holey curry puff...

This is proof that every curry puff is hand made and each one is different. ;-p

Related posts:
1. Old Chang Kee: Filling not enough.
2. Old Chang Kee: Initiated a long position at 26c.

Wilmar: Settling dust?

Bollinger bands are very popular in TA. Upper band acts as resistance and lower band acts as support. Look at Wilmar's daily chart, we see that price has pushed past the lower band. This gives us a very bearish picture. Support is weak. It also tells us that the counter is deeply oversold but remember that in very bearish conditions, oversold can stay oversold. It really doesn't say anything else.

Conventional TA tells us that we should buy when price breaks the lower band. This is to take advantage of oversold conditions. The belief is that, eventually, price would return to the lower band and then the middle band. The operative word here is "eventually". When exactly? Your guess is as good as mine, is it not?

Anyone who bought Wilmar's shares three sessions ago as it closed below the lower band at $4.70 would be licking serious wounds as the counter closed at $4.14 in the last session. Selling pressure has been enormous as share price went much lower.

The Lord Buddha said that nothing is permanent. Similarly, buying or selling pressure would come to an end one day. As our resources are limited, we want to buy when the selling pressure has dissipated.

Volume would be a good indicator if the sellers are done. In the last session, although Wilmar's share price closed lower, volume was less than half of the preceding session's which saw a huge gap down in price. A black spinning top was also formed and spinning tops, whatever the color, are usually signs of indecision on Mr. Market's part. Indecision in a downtrend? Doesn't that sound like good news for long holders? However, we should remember that one stick patterns are not very reliable. So, I would take this with a pinch of salt.

If price continues to decline with smaller magnitudes as volume reduces further, it would be a sign that selling pressure is dissipating and that the counter's share price could be looking for a floor, if not the bottom. This is when I would add to my long position. Bear in mind that it does not mean that price has bottomed as we can only call a bottom once it has been formed. Yes, only hindsight can call a bottom and hindsight, apart from being academically attractive, isn't terribly useful.

Dust is very much still in the air here and although it might not be in the same league as Long Men Ke Zhan's sandstorms, visibility is still not good enough for me. I am staying indoors for now.



Related post:
Wilmar: Mr. Market reacts to weaker earnings.