Sunday, 22 September 2013

Is now a good time to buy Singapore REIT (S-REITs)?

Fed surprised the market by leaving QE intact for now. S-REITS price rebounded last Thursday. Will S-REITS price rebound further or stablise at current level? or will S-REITS keep its falling trend from the Mid-May peak?

What will happen next? Let's take a look at technical chart first.  Use Mapletree Industrial Trust, one of the large cap industrial REIT, for example.

The weekly chart shows UP trend.

The following indicators in weekly chart are generally positive:
1. MACD lines shows uptrend. Besides the price dropped to a new low recently, but the corresponding MACD bar low point is higher than previous low - bull sign.
2. KDJ shows uptrend: a rather strong uptrend is forming out of a flat basin bottom.
3. Parabolic shows first sign of reversing.

Some other indicators are not so conforming though:
1. EMA is still downward.
2. Bollinger band mid-band was not broken yet. ( check the last week's candlestick: a long upper shadow and no lower shadow, indicating the fight to break mid-band resistance)

However, the monthly chart shows DOWN trend to continue.

1. KDJ is still showing some further room for price drop,
2. EMA shows a clear downward trend,
3. Parabolic continues to go south,
4. Last 2 month's candlestick is flirting with Bolligner mid-band, if the price "determined" to go further down to hit the lower bound of 1.10. It means that the price could drop 17% further from current price of 1.33.

For MIT, the current price indicates an about 7% yield. If that is comfortable, one may wish to load some as the price should be stablizing and the further large drop may not materialise. But it is denfinitely not the "diamond" low, so do not load with all your chips.

Now let's see some more charts, selecting from REITS categories such as Commercial, Retail, Healthcare etc.  

All charts agree with the above analysis.

Weekly and Monthly chart for CapitaMall Trust:  

 Weekly and Monthly chart for Keppel REIT: 

Weekly and Monthly chart for Suntec REIT:

Note: Suntec's weekly charts shows stronger rebound trend than other REITS's, as Suntec's DPU is expected to rise with Suntec AEI starts to contribute. 

Weekly and Monthly chart for First REIT:

Note: First Reits's rebound in weekly chart is tepid, as it's currency risk exposure is still a concern to investors. 

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