Ascott REIT Still Under Pressure

It's been awhile since I updated the ongoings with Ascott REIT with my last post being more than a month ago (see Ascott's Bounce Unsuccessful for the detailed discussion). In that analysis, I highlighted that "we might see hovering around its current support at $1.21 to $1.23 for the next few days." I also said that prices may "even breech $1.21 to its previous support at $1.20. As volume is still weak I doubt there'll be any testing of the $1.28 resistance any time soon." Here's how that played out.

It's been more than a month and prices have still yet to come close to its previous resistance. Also, although the $1.20 wasn't breeched or reached firmly, prices did briefly touch for two days in a row before leap-frogging upwards for another failed rally.

Prices however remain steadfast with support of the 50 day moving average despite what seems to be quite a bit of pressure from the last three days. Furthermore, a gravestone doji forming yesterday doesn't bode well. So turning to the indicators, it may be possible to get some clues as to what can we expect next.

%R and OBV has dipped downwards with %K looking to be doing likewise. Also, although volume bars for the MACD seemed to be turning up, the action yesterday brought it back down once more. RSI too, hasn't turned up decisively which doesn't contradict the negative sentiments displayed by the other indicators. Furthermore, volume is lacking so it looks like price will remain weak for awhile.

Looking at the other indicators, P&S shows that momentum is still down. ADX shows no strong trend developing with DI- and DI+ turning downwards. Confusing this is...However Bollinger bands and GMMA have entered a squeeze which could mean a sudden explosion of movement is arriving soon. But the million dollar question is...in which direction?

My take:

It is likely that prices are gonna be stuck in the range of $1.22 - $1.24 for awhile longer. However, as the pressure seems to be like a hammer on the 50dma, it wouldn't surprise me if support at the 50dma breaks and someone will sell out and release his/her shares at a lower price possibly causing prices to dip to their 100dma briefly. That's briefly because there are buyers waiting at $1.20. As such I remained undecided which direction the prices will take when the spurt occurs.

On one hand, if the spurt happens, as hinted by the Bollinger Bands and GMMA, we may see prices catapult upwards like it did previously as indicators are mostly in the oversold region or heading there so there's a good chance that it may spring up instead of down. But if volume is not there to back it up like before, it may just turn out to be another fake rally. On the other hand, pressure from above may see prices drop to the 200dma instead.

With a yield of 7.14%, gearing of 40% and a 5% discount to net asset value or a price to book of 95%, Ascott REIT may be better  and more alluring as a dividend stock especially with backings from Temasek. However, in terms of growth, that remains a question.

Not vested,

~K

ComfortDelgro - Break Out Nearing?

Two weeks ago, in my last observation of ComfortDelgro (refer to Comfort Cab Speeding Up Too Fast?), I gave the opinion that "instead of...dropping back to its 14dma at $1.57, prices will continue hovering for the next couple of days while awaiting the 14dma to catch up with it" and prices would likely "bounce between $1.59 - $1.63" and that "I do not expect resistance to be taken out just yet." Here's the current chart to see how that turned out.

As we can see, prices bouncing around the mentioned range did occur and is still ongoing with resistance yet to be broken. On the downside, my estimate was short of 1 cent, with prices bouncing to $1.64 instead of $1.63. A mild underestimation I feel. However, upon experimenting with the moving averages, I realized that the 20 day moving average was more suitable as it seemed to provide more support compared to the 14dma. Here's the chart below:

That said, it leaves more room for prices to bounce while waiting for the 14dma and 20dma to catch up before breaking out. However, sometimes prices seem to just break without waiting for their moving averages. So to determine if a break out is nearing indicators would provide some clues.

As we can see, prices have moved into the overbought region in Stochastics and Williams%R, with RSI just bordering it for quite awhile now, showing good momentum in this stock. Furthermore OBV has yet to dip. MACD however, looks like it intends to intersect, which may led to some buying. However that said, the OBV and W%R has flattened out. Normally, when W%R flattens out, it is likely to head down. 

A quick check with the chart below shows that the ADX indicates that the trend is very weak with neither buying and selling gaining any upper hand. Futhermore, the GMMA shows that there's some pressure ongoing in the short term moving averages as the lines have yet to separate proper. However, the lines do seem like they're beginning to spread indicating positive momentum starting up.

 

My take: 

It is possible that resistance will be taken out. However, I expect prices to remain trapped by the $1.64 - $1.61 range a bit longer supported by first the 14dma and then the 20dma, perhaps till mid or end of next week before clearer signals present themselves if a break out will occur. But for now, I don't think that will happen yet.

Again as mentioned in the last post, with "a P/E of 15 and yield of 3.25%, anyone buying into this for dividend yield may find SBS Transit a more enticing buy at the moment with a lower P/E and a better yield." That said, it may be better to find yields outside the transport sector. 

Not vested in either,

~K

P. S. I'm trying to decide is breakout one word or is it two? Does anyone know? =)