CapitaMall's price has fallen from a day high of $1.89 on 17th Sept 09 till an intra-day low of $1.54 on 29th Oct 09 after several of events during these periods. Firstly, the proposal of listing of CapitaMall Asia by Capitaland has caused some unrest in the price of CapitaMall as funds might be selling off their investment in CapitaMall to channel into CapitaMall Asia. Secondly, the announcement of another strong set quarterly earning was offset by analysts concern of any further acquisition in the future. The XD of 2.35cents/share caused the share price to drop further.
Technically, the compression of the long-term GMMA indicators suggesting that mid to long term investors are presently selling off the stock. Short-term wise, the share price might have found a temporary support at around the $1.55 level as both the RSI and Stochastic have hit bottom and on a rebound. However, if these investors continue the selling, this support price level might not be able to absorb most of the selling and potentially price level could fall further to around the $1.48 level where the 200d EMA sit. Furthermore, the DI pair is negatively placed in the ADX chart which further suggests price weakness and any rebound from $1.55 might lack the strength.
The concern now is can CapitaMall absorb the heavy selling pressure around the $1.48 - $1.55 level. If it is able to do that, this will build a very strong base around this level. If it cannot absorb the selling, potentially, the price level can drop to the next support at around the $1.38 level.
CapitaMall has a NAV of $1.57 and at the price of $1.60, the dividend yield is about 4.7%; which probably lack attractiveness as compared with other Reits having a dividend yield of at least 8%. As the price dip to $1.38, it will be about 12% discount to its NAV and having a dividend yield of around 5.4%.
For long term investors who are keen on CapitaMall should spread out the purchase around the $1.48 - $1.55 and $1.38 region. For short-term investors, not advisable to buy into this stock until the selling pressure has eased to minimize downside risk.
