Hongkong Land - Breakout from key resistance suggests further upside

Key resistance taken out. Hongkong Land could see further upside after successfully taking out the US$3.90 key supportturned- resistance level. Incidentally, the last time the counter closed above this key level was nearly a year ago.

Renewed upside momentum. With the MACD indicator showing signs of turning up again, it suggests that the upside momentum could be building up again.

Near term correction likely. However, as the RSI is still indicating a heavily overbought signal, we could see the stock retesting the US$3.90 key level again. A successful retest at this support could confirm and form a base for the next leg of recovery.

Initial resistance at US$4.38. We expect the stock to test the initial resistance at US$4.38 (minor peaks in Jul ‘08), breaking which, the next resistance is at US$4.55 (gap zone in Jun ‘08).

Immediate support at US$3.90. Below the key US$3.90 support, the next support could be found at S$3.74 (resistance-turnedsupport level).

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Hongkong Land - Potential correction at key gap zone resistance level

- After rallying by more than 32% over the last 2 weeks, Hongkong Land is showing signs of fatigue with the formation of a spinning top and doji candlestick just shy of the key gap zone resistance level at US$3.43.

- With the RSI showing signs of falling out of the overbought region and the ROC indicator signaling a sharp bearish reversal high up in the positive territory, they seem to suggest that the uptrend momentum is waning and correction may be inevitable.

- We expect the stock to find initial support at US$3.20-US$3.25 (minor gap in Sep ‘08), breaking which, we see the next support at US$2.86 (resistance-turned-support level and 3-month uptrend line)

- Immediate resistance is pegged at US$3.70 (support-turned-resistance level), ahead of $3.93 (support-turned-resistance level).

Buy HK Land, United Fiber, Sell SPC

United Fiber System (UFS SP; S$0.025) – BUY

• Appears to be forming a rounded bottom. Now that it is trading above its 30-day SMA, the chances of its climbing further have increased.

• MACD has just moved into positive territory suggesting that the buying momentum is still rising rising. However, its RSI is flat. Mixed indicators indicate that the stock is still in consolidation.

• Aggressive investors should only buy on weakness. Cut losses if the S$0.015 support gives way. Resistance is seen at S$0.04 and S$0.055.

United Fiber System is a group with significant regional presence and with synergistic operations in forestry, pulp production and construction.

Singapore Petroleum Corp (SPC SP; S$3.02) – SELL

• The stock has continued to climb upwards within its uptrend channel that begun since October last year. It has tested this channel’s resistance at S$3.22 recently but could not break it – the first sign of weakness.

• MACD is still marginally positive but RSI has hooked downwards from an overbought level.

• Expect more downside from here as selling accelerates. Any rebound back up to test the channel resistance is a chance to sell. Support is seen at S$2.75 and S$2.63.

SPC’s business activities include oil and gas exploration and production, gas pipelines, refining, terminalling and distribution, marketing, trading and sale of refined products. In the Singapore retail market, SPC continues to strengthen its brand and provide a comprehensive value proposition of quality products and excellent service.

Hongkong Land Holdings (HKL SP; US$2.36) – BUY

• The stock broke out of its short term downtrend resistance and rallied to a high of US$2.55. Since then, it has been under some selling pressure probably due to profit taking. Resistance is seen at US$2.58 and US$2.70.

• Technical indicators are still positive but are showing signs of lethargy. Daily RSI has hooked down.

• However, since the longer term charts are still positive, we think that the stock still warrants a buy. However, it may be better to buy nearer to support levels - US$2.27 and US$2.15 (its 30-day SMA). Investors who bought earlier may want to lock in some profits now.

Hongkong Land Holdings Limited is incorporated in Bermuda. Its primary listing is in London, and its shares are also listed in Bermuda and Singapore. The Group’s assets and investments are managed from Hong Kong by Hongkong Land Limited. Hongkong Land is a member of the Jardine Matheson Group.

Sell City and HK Land Technically

Technically…

City Developments (CIT SP; S$5.09 – SELL): Recent low of S$4.82 may be retested soon. Break below that level could see S$4.70/S$4.46 being tested next.

• The stock broke below its S$5.13 support recently and is still below it. Unless the stock can close back above it, more selling could take place soon. Maintain sell on strength with resistance seen at S$5.15 and S$5.55.

• Indicators are improving but have yet to confirm the turnaround. RSI is still below its neutral mark and MACD is still negative.

• The recent low at S$4.82 could be tested again soon. A break below that level could see the stock fall to S$4.70 and 4.46 next.

Hongkong Land Holdings (HKL SP; US$2.00 – SELL): Selling momentum may pick up as MACD and RSI have turned negative. Close below US$1.88 could see next support at US$1.75/US41.50 being tested.

• Appears to be sitting just above forming its consolidation triangle support at US$2.00. A downside break to close below US$1.88 would likely induce further selling on the stock. The next support is at US$1.78 and US$1.50.

• Both MACD and RSI have turned negative, suggesting that the selling momentum could be picking up.

• Resistance is seen at US$2.20 and US$2.55.


Fundamentally…

Action Asia (ACTA SP; S$0.055 – Not rated): FY08 results are due by end this week. Given its last announced net cash balance of S$40.9m and that the Company has not paid any dividends for the three quarters of FY08, a DPS of 0.2-0.5cts seems a reasonable assumption. This translates into dividend yields of 3.6%-9.1%. Note that its net cash position is 1.9x its market cap of S$22.0m. Not rated.

• The stock has fallen below its long term sideways trend channel. Unless, the stock can regain the S$0.06 resistance soon, the stock could see more downside. Support is at S$0.04.

• Technical indicators continue to show mixed results, suggesting that more sideways movement is likely.

• Until there is a pick up in volume, the stock would likely continue to drift sideways. Investors would likely do well to sell out and look for opportunities elsewhere.