STI Technical Analysis 27th May 2010

STI staged a nice rebound. My primary count is that we have completed wave A of Primary 2, exactly at the 23.6% retracement line.

The rise from 1455 to 3037 represents my Primary 1 with a 3rd wave extension. Primary 2 begun at 3037, and would usually achieve at least 50% retracement. That could possibly mean STI to reach 2243 in a few months time after this technical wave B rebound.

STI Technical Analysis 21st May 2010

It looks like my maximum downside target has been reached. That was where I entered AIMSAMPIREIT. AIMS isn't an STI component stock, so it will not be affected too much. On hindsight, I should perhaps enter STI ETF instead for a probable 300 points rise (30 cents on STI ETF).

Mentioned in an earlier post on 2nd May 2010 was a mini Head and Shoulders. A larger Head and Shoulders formation appear to be forming. With this expectations, there is high probability of the market bouncing up from here towards 2945 (>61.8% retracement), a previous high.

Purchased some AIMSAMPIREIT

STI went to hit 2676, very near to the 2675 low last hit on 9th Feb 2010. I was contemplating whether to buy in some blue chips to trade, but in the end, I decide to follow my original plan of a dividend portfolio.

I added 25 lots of AIMSAMPIREIT at $0.205 to my portfolio, reaching a total of 70 lots.

My reasons for purchase were that

STI Rebounding time?

STI looks set for a possible rebound. I counted 5 waves down, and STI has touched the 200 SMA.

My expectations is that if it does break, it will not break this 200 SMA convincingly as this is possibly a 5th wave of some small degree. The alternate count would be a 3rd wave extension, the 3rd of 3rd wave. A technical rebound should be in the works, but it will just remain as it is, a technical rebound. I'm bearish bias at the moment since the mini Head and Shoulders breakdown.

In addition, it looks as if a bigger Head and Shoulders might be forming on the weekly chart. Will have to monitor. This right shoulder should be the cap to any technical rebound by STI, possibly around 2945.

I don't expect STI's move down to go past the 2nd red line before a 3-waves move up for the technical rebound.

My cash level has increased further to 8.45%. However, there's not much that I want to purchase yet, so I shall await better prices for some of my targets patiently.

AIMSAMPIREIT 4Q2010 Results

Basically, this is another undervalued gem in my opinion, in the leagues of Saizen.
My earlier write up of this REIT is here

The results was a nice surprise for me in terms of the DPU. It was slightly above my expectations. Earlier, I bought based on a conservative estimate of 0.45 cts DPU, although my calculations showed at least 0.5 cts DPU. The surprise was that DPU came out to be 0.5376 cts, giving me a nice dividend of $241.92 for 45 lots payable in June 2010.

This works out to be about 10% yield based on my entry price of 0.215 on a low gearing of 29%, among the lowest in the industrial REIT sector.

The NAV remains at 31c. There's also no management fee bonus paid out ==> it's only paid when the DPU increases by at least 2.5%. Have to monitor to check that management does not increase gearing unnecessarily and dangerously to increase DPU so as to get fee bonus.

This is a short post to update as I'm really really tied up with work these few weeks :(

Saizen REIT 3Q2010 results

I have to say that their report is very clear, completed with a nice content page and explanation of the results, which was within expectations. Some summary of their results:

1) All CMBS loans except the mega YK Shintoku loan has been repaid via either bank borrowings or cash. As for the YK Shintoku loan, the loan servicer is still in process of formulating  acourse of action.

2) Saizen has commenced accumulating cash in May 2010 for resumption of distribution. Good news!

3) On top of the JPY 1 billion loan of YK JOF mentioned in my earlier post on Saizen, another JPY 2 billion loan for YK Shinzan has been drawn successfully.

4) YK Shintoku's CMBS defaulted loan remains at JPY 7.7 billion

STI - Cup And Handle Breakdown?

Suddenly thought I saw this pattern on STI... A bullish cup and handle formation that broke down.

When a supposedly bullish formation breaks down, it's very bearish bias. Similarly, when a supposedly bearish formation breaks up, it's very bullish bias.

To me, the chart below is rather bearish if it's true... couple with my expected EW Primary 2 count, I have more reasons to be on the more bearish side.

How Companies Calculate Depreciation

Basically, there are two possible ways for companies to calculate depreciation.
1) Straight line depreciation method, or
2) Accelerated depreciation method.

Straight line depreciation is calculated by spreading the asset cost evenly over the assumed lifespan of the fixed asset. Starhub, a telco in Singapore, uses this.

Accelerated depreciation is done by expensing a large part of the cost at the beginning of the life of the fixed asset, and lesser at the end. Cars in general undergo such depreciation; the moment you buy a car and use it for a very short time, the value would have depreciated by more than a proportionate amount.

STI Technical Update (6th May 2010)

Although I was about to sleep, I keep having this nagging feeling that I need to share my latest thoughts on a possible wave 3 extension of my expected A wave.

In this scenario, it would be very bad... Wave 3 is the strongest wave, and wave 3 of 3 will definitely smash most supports like bean curd.

The below shows my chart and my expected wave counts:

StarHub 2010 First Quarter Results

StarHub Reports 2010 First Quarter Results

* Operating Revenue Increased 5% To S$557 Million
* FCF Per Diluted Share Increased 4% To 6.97 Cents
* Interim Quarterly Dividend Of 5.0 Cents Per Share

Singapore, 6 May 2010 – StarHub Ltd today announced its results for the quarter ended 31 March 2010. Total operating revenue increased 5% to S$557 million from S$531 million. The quarter saw a high post-paid mobile net add of 27,000 customers. The higher investment cost for acquisition and retention for smartphone customers resulted in the Group’s EBITDA contracting to S$118 million. Consequently, profit before taxation was at S$53 million year-on-year (YoY) and net profit after tax decreased to S$43 million. Free cash flow at S$120 million was 4% higher compared to last year’s S$115 million. Capital expenditure was 4% lower at S$49 million compared to the same period last year.

STI Technical Update

Perhaps we have already entered the downtrend.

A recap of the A-wave downwards (assuming it's an A wave after 5 waves up) taken from wikipedia:

Wave A: Corrections are typically harder to identify than impulse moves. In wave A of a bear market, the fundamental news is usually still positive. Most analysts see the drop as a correction in a still-active bull market. Some technical indicators that accompany wave A include increased volume, rising implied volatility in the options markets and possibly a turn higher in open interest in related futures markets.

Investing Strategy

Previously, I pointed out that I think STI could have topped. It may or may have not, but as concluded, scraping the bottom of the barrel isn't very ideal...

With this, my strategy for incoming salaries and dividends remains the same: Accumulate the cash, and only enter when the skies are clear.

Supposed I can keep my hands away, I shall be able to achieve 10% cash by the end of June 2010. That's if I don't grow itchy fingers :x

Then again, what's to stop me if I think there's sufficient value and safety margin to enter? Saizen at 0.165, AIMSAMPIREIT at 0.215, Starhub at $2.15, Singtel at <$3?

In a bull market, most people become a genius with the Midas touch. I don't want to fall into the trap. Have to exercise a lot of caution from now on...


P.S. This post is very short because I have no idea what to write next, or what stocks to look at next. Basically, it sums up my actions and thoughts now.

STI Updates -- We could have topped

As we climb a wall of worry, the risks of entering gets higher and higher.

It appears that the STI 3000 level is getting very hard to breach... My Elliott Wave count has completed it's intermediate 5th wave; 5 waves for this 5th impulse wave has been counted.

Of course, I do not doubt that my counts are wrong, of if there could be a wave extension for this 5th wave. To me, Elliott Waves go hand in hand with economics news; I use world news in an attempt to justify the preferred count, to fine tune my count.

My chart:

April Portfolio Update

April portfolio consists of Saizen Warrants Purchase at 0.075 and a 2nd round of loading of Aztech at 0.24.
This is the month where Starhill announced results of dividends $190. Starhill also announced a new CEO and the purchase of Malaysian properties, which is yield accretive.

A number of my holdings went XD, Capitaland, ST Engg, Aztech, which help contribute to their recent downturn.