Turning my 3x-wema, HABBSTS charts to Rickmers Maritime

3x-wema, HABBSTS trading indicators setup

In the past weeks, I have written and demonstrated two very good trading indicator setups for use on the weekly time frame meant for long term investors.

Setup #1 – Weekly chart with 13-week, 26-week and 52-week exponential moving averages. I name them ’3x-wema’.

Setup #2 – Weekly chart using what I call Heikin Ashi Bollinger Band Stock Trading System or HABBSTS. This setup combines Heikin Ashi Candles with 13-week Bollinger Bands and 3-week/displaced 2 exponential moving average.

In my opinion, good setups that combine multiple trading indicators should have 1. good fit 2. produce signals that are not ambiguous and 3. minimum false signals. Since these two setups are meant for investors to use on weekly time frames which have pretty long horizons, they need not produce many signals. The signal emphasis is placed on few but high probability and elimination of false leads. Unambiguous means it must come down to as simple as Green for ‘Go’ and Red for ‘No-go’.

Demonstration and explanations for these two setups can be found here, here and here.

 

Looking at SG-listed Rickmers Maritime through these 2 setups

Today I look at Rickmers Maritime (ticker B1ZU.SG) because blogger Kyith Ng at Investmentmoats has written a very compelling report ’Rickmers Maritime – Now for the Bond Holders to Suffer‘.

Rickmers Maritime, once a 10% high dividend yielding shipping trust, have updated that they are not able to pay the interest and the principal on their US$179 mil senior debt due on Mar 2017.

This piece is about Rickmers. And specifically on their bond holders.

So the management’s proposal is to exchange the existing principal amount of notes and interest with a new unsecured SG$28 mil fixed rate step-up perpetual convertible securities.

What a mouthful. Basically the security is hybrid until cannot hybrid. Usually when people source for capital they look for equity, bonds, perpetual bonds, convertible bonds. This one combines everything.

The main reason is to do this is that, they do not have much choice. They have exhausted all their options.

If they do not do this, they will face liquidation.

Rickmers Maritime is a shipping trust that operates containership chartering.

Like my previous discussion on Oil & Gas sector stocks Keppel Corp, Sembcorp, Sembmarine, Swiber and Kris Energy all of which are doing very badly because of a slump in price of crude oil, I find that both setups #1 3x-wema and #2 HABBSTS are very clear about Rickmers. There is absolutely no reason to go long, there is no buy signal although there are plenty of sell signals. Should one have the stomach to go short and have the means to do so (such as through CFDs), then both setups are absolutely clear that the trend of Rickmers Maritime is still down.

 

3x-wema with 13-week, 26-week and 52-week exponential moving averages

  1. All 3 exponential moving averages are pointing down.
  2. Wide spread between all 3 indicates that down momentum is quite strong.
  3. Price action indicates that the 26-week exponential moving average (blue) and then subsequently the 13-week acted as resistance.
  4. Price has never shown any turnaround, has not beat any of the moving averages to the upside and never has the moving averages done any golden cross.

No buy signal (plenty of sell signals previously).

Rickmers Maritime (Singapore SGX -listed stock) shown on 3xwema setup

Rickmers Maritime (Singapore SGX -listed stock) shown on 3xwema setup

 

HABBSTS

  1. Based on Heikin Ashi colours alone, price continues down.
  2. Bollinger Bands show price trending i.e. sticky to the lower band.
  3. Price has never beaten or closed above the 3-week displaced 2 exponential moving average (red).

No buy signal (plenty of sell signals previously).

Rickmers Maritime on HABBSTS setup

Rickmers Maritime on HABBSTS setup

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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005. Soh Tiong Hum is a member and regular speaker at Technical Analysts Society Singapore events and has a bi-monthly lunch time event at IG Singapore on forex and stock markets. He is an avid blogger on technical analysis topics; his Twitter account @sohtionghum was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX. Come find Tiong Hum on Google+
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