Unit prices of many Singapore-listed REITs (or Real Estate Investment Trust) have seen their unit prices battered over the past few weeks.
I was studying at the unit price movements of these REITs have moved and 3 of them looked like their unit prices are about to reverse back up. In this post, I’d like to share with you what these 3 REITs are, my technical analysis of how their unit prices may possibly move in the near-term, along with some of the price points (based on my analysis) you may want to take note of.
The technical analysis indicators I have used in the charts you’re about to find below are:
- Moving Averages – 20 day (in dark green), 50 day (in light green), 100 day (in orange), 150 day (in yellow), and 200 day (in red) – all on a weekly timeframe
- Bollinger Band on a weekly timeframe, with the upper and lower bands in light blue
- Moving Average Convergence Divergence (or MACD)
1. Ascendas REIT (SGX:A17U)
The blue-chip industrial REIT saw its unit price slipping from a high of $3.65 in 30 July 2020 (noticed how its unit price broke down immediately after it protruded out of the upper band of the Bollinger Band) all the way to a low of $2.86 when the market closed yesterday (10 March 2021) – a drop by 21.6%!
If you look at the very last candlestick in the chart above (for yesterday), notice how the REIT’s unit price rebounded after touching the 200 day moving average, and when the market closed yesterday, its closing price was right at the lower band of the Bollinger Band – a sign that its unit price is about to reverse back up.
In terms of the technical indicators, while MACD is still in a downtrend position, but in terms of stochastic, look at how the blue line is about to cross above the red line into an uptrend – this is another sign that its unit price is about to bounce back. If it happens, then in my personal opinion, it could possibly move up to the resistance line at where MA150 is at $2.90; if it is able to break above this resistance line on a high volume, then the unit price of the REIT could rise further up to where MA20 is at around the $3.00 mark.
2. Keppel DC REIT (SGX:AJBU)
The data centre REIT (which is also a constituent of Singapore’s benchmark Straits Times Index) is another one which saw its unit price falling after reaching near to the upper band of the Bollinger Band in early February 2021 – where it broke under the MA20 and the MA50 support line, and even fell out of the lower band of the Bollinger Band. The unit price of the REIT closed at $2.55 yesterday (10 March 2021.)
While the REIT’s current unit price is somewhere between MA50 and MA100, but notice that it tend to bounce up whenever it touched $2.53 the past few days, suggesting that the unit price might possibly reverse back up from there.
Looking at the technical indicators, while MACD is still in a downtrend position, but notice how the stochastic is now in an uptrend position at an oversold territory – another sign a reversal back up might be in sight – if it indeed happens, then the REIT’s unit price could potentially head up to $2.74, where MA50 is (and also a support-turned-resistance line.)
However, should the unit price continue to retreat, then it could potentially go down to where MA100 is at $2.32 – and that’s the price point where I’m looking to add the REIT to my long-term investment portfolio (based on its distribution payout of 9.17 cents/unit in FY2020, it represents a yield of 4.0%.)
3. CapitaLand China Trust (SGX:AU8U)
Previously known as CapitaLand Retail China Trust, as the name suggests, the REIT’s properties in its portfolio are all located in China. Also, as we all know, it is the only country that has seen its GDP grow in the year 2020. China have also very effectively brought Covid-19 under control and at the time of writing this post, normal businesses have more or less resumed.
In terms of the REIT’s unit price movements, notice how it started to retreat after breaking above the upper band of the Bollinger Band at $1.48 on 15 January 2021 – where it broke under MA150, as well as under MA100, and is currently hoovering at where MA20 is (at $1.33) – looking at its unit price movements over the past couple of days, and also the up arrows in the chart above, notice how the REIT’s unit price bounce back up every time it touches this support line.
As far as the technical indicators are concerned, MACD is about to turn into an uptrend (where the blue line is about to cross above the red line), and stochastic is already in an uptrend (where the blue line have crossed above the red line and pointing upwards) – both are evidences that a reversal may be in sight – should the unit price of the REIT head back up, then it could potentially go up to $1.39 (where MA100 is.)
So there you have it – the 3 Singapore-listed REITs which could see their unit prices reverse back up in the near-term.
Before I end today’s share, a disclaimer – everything you have just read above is purely for educational purposes only, and they do not represent any buy or sell recommendation for the REIT’s units. As always, please do your own due diligence before you make any trading or investing decisions.
Disclaimer: At the time of writing, I am a unitholder of Ascendas REIT.
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