In my previous post entitled Two Extremes: Starhub - Falling Star, Singpost - Blasting Off!, I noted the giant movement in prices in both Starhub and Singpost.
Today, Ascott Residence Trust, a subsidiary owned by Temasek Holdings (48.1% stake), is also another stock which made a nice leap upwards, trashing its resistance at $1.23 and headed to its next resistance of $1.28 where it closed. However a closer look at the chart below shows some uncertainty to this move.
Unlike Starhub and Singpost in the previous post, Ascott's leap today did so on a rather small volume. Futhermore, you can notice the volume making lower highs. Such divergence in volume and price movement must be viewed with caution. Don't be an "ass caught" (pun intended) as prices may be sent downwards hereafter.
Does this mean that prices won't head higher? No it does not. Prices may still breech resistance. However as the volume supporting this rise is low, the rise in price may only be temporary which may result in another pull back in the short term.
On the other hand, support seems to be strong from the collision of the 14day moving average with the 50dma at $1.22. Furthermore with prices making higher lows, prices may rise higher thereafter. But once again, volume shrinking doesn't support this. So caution.
That said, personally with uncertainty lurking, yield at 5.8% and Price to Book at a premium of 1.04, I wouldn't invest at the moment as Ascott REIT is rather unattractive at current prices.
Not vested.
~K
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