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Selected property stocks strengthen, small cap developers could follow as indicators turn

The Edge Singapore
The Edge Singapore 3/26/2021 09:54 PM GMT+08  • 3 min read
Selected property stocks strengthen, small cap developers could follow as indicators turn
Property stocks have strengthened, led by UIC initially, then UOL and now Ho Bee Land. Small cap developers could follow.
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UOL Group appears poised to break out of its twice tested resistance at $7.80 to $7.90. A successful break appears almost imminent. In this event, the immediate upside would be around $8.50. Quarterly momentum is skimming off its equilibrium line and appears poised to move above its resistance line at its own moving average. Volume remains modest but could expand in the week of Mar 29 - Apr 1.

Already, UOL’s subsidiary, United Industrial Corp has broken out of the top of a multi-month base at $2.45 indicating an initial upside of $2.90. Its medium term indicators have turned increasingly positive.

SEE:UOL Group gets TP raises on asset enhancement opportunities: analysts

Fundamentally a couple of factors are in favour of UOL rising further. It could end up carrying more weight in various indicates. Secondly, the government says employees may go back to their workplaces from Apr 5. Offices could fill up again. Andecdotal evidence suggests office rents are firming. UOL has an office portfolio that sits in UIC.

Elsewhere, Ho Bee Land ($2.53) has moved out of a narrow sideways range, breaking out of a multi-month range at $2.45, on Mar 26. The breakout, confirmed by a modest volume expansion, and an upturn in quarterly momentum, indicates a target of $2.95 to $3.00. Support is raised to the breakout level.

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Among the smaller caps, KSH Holdings, which has been entrenched in a sideways range for close to 12 months, is showing signs of life. Volume has expanded, and quarterly momentum has bounced up off its equilibrium line on a white candle day on Mar 26. To prove this is not a flash in the pan, prices need to break above the top of the sideways range at 36 cents. If so, the upside could be as high as 45 cents. KSH ended the week of Mar 22-26 at 35.5 cents.

The Straits Times Index rose 23 points week-on-week to 3,157, confirming that the break above the narrow 3,071 to 3,118 range in the week of Mar 15-19 is valid. The breakout provides the impetus for the index to tests 3,368 to 3,377 in the next four to six weeks. Quarterly momentum which had been challenging a resistance that coincided with its own moving average has managed to move above this confluence. The index’s long term indicators continue to rise and should be able to support the STI’s uptrend. Hence, overall, pressures should continue to be upwards. Immediate support is at the 3,071 to 3,118 range.

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