Wednesday, August 5, 2020

Fintec Global Bhd (Rm0.13)

Fintec is a Malaysia-based biotechnology, technology incubation and portfolio investment holding company. It is one of my favorite stock and I have mentioned this stock several time before.

Fintec is the second most active stock on Wednesday with 622 million share traded, the volume changed hand represent 46% of its total number of paid up share of 1,339 million. It gained 3 sens or 30% to close at 13 sens.

The most active stock is Vsolar with 689 million share traded. Fintac is holding 14.32%  of Vsolar.

Fintec has invested in many listed Malaysian companies that include TNB(0.01%), Komark(19.82%), Seacera(12.52%), Focus (25.02%), Vsolar(14.32%), AT(S)(28.29%), Netx(7.56%), DCB(7.37%) and Mlabs(11.2%). Its holding in these companies at today's closing price is worth Rm964 million or Rm0.72 per Fintec shares.

Fintec most valuable investment is its 25.02% holding in Focus. At Focus current price of Rm1.68, this stock has appreciated in price by 1200% in the last two years. During the same period Fintec's price has appreciated by only 85.7%.

The wave count for Fintec is as shown below. It is currently forming its sub-wave v that is likely to end either around Rm0.22 or Rm0.275 (my estimation).

For its last quarter ending 31/3/2020, Fintec EPS is 8.29 sens mainly from the fair value gained for its investment holdings. Net assets is Rm0.51. For the second quarter ending 30/6/2020, its estimated EPS is around 10 sens mainly from fair value gain and with net assets at Rm0.61 per share.


Monday, August 3, 2020

EG Industries Bhd (Rm0.59)

EG gained 17 sens or +40% on Monday with a fantastic volume of 102 million, which represents close to 40% of its total number of share.

On chart EG is currently forming its wave (iii). If this wave (iii) can move up by 150%, same as that for wave (i), it can reach  Rm0.85. Very often wave (iii) is the longest wave among the five. Using fibonacci ratio of 1.618x150%=243%, wave (iii) may be able to reach Rm1.16.


Saturday, August 1, 2020

New bull supported by excessive liquidity?

The fundamentally impossible but technically possible mega wave (3) option that I have been keeping at the back of my mind seemed to be the most likely option now. From close to near zero probability in March, I even find it radiculous to mention about this possible wave count at that time, its probability slowly increase with the injection of more money by every nations.

The US has its unlimited QE programme (unlimited money printing). European Union latest 750 billion euro stimulus plan came out last week. In May the Japanese Government approved a fresh 31.9 trillion yen budget to fund the proposed 117 trillion yen economic stimulus programme. The Chinese fiscal stimulus package is worth 3.6 trillion yuen (US$506 billion). With so much money flowing around, where can they go? They cannot be left idle in the banking system.

Dow was having its sub-wave ii correction in the last few days. By next week if Dow can move above the 27,005 level, I can safely forget about the super wave VIII correction that I have been mentioning all this while since the March's bottom of 18,213.

Dow took 11 years from March 2009's low of 6,469 to February 2020's high of 29,568 to complete its mega wave (1) with a gain of 357%. Since, in general, wave 3 cannot be shorter than wave 1, technically the mega wave (3) needs to go up by at least 357% from its mega wave (2)'s low of 18,213 level within the next 10 to 12 years. A 357% gain will theoretically put mega wave (3) to at least 65,000 level !!!

Back to the Dow current situation, it closed Friday session gaining 114 points to 26,428. Until Dow is able to move above the 27,005 level, another about 600 points to go, or 2.3% to go, I still cannot knock out the super wave VIII option on paper.

However as early as mid-May 2020, a famous Malaysian finance blogger, Salvador Dali, in his article 'The Market's Disconnect to the Real Economy and the Glove Factor' (click for the full article) published on June 6 in his Malaysia-Finance Blog, he mentioned that he turned bullish on 18 May because of reasons mentioned in his article.

Basically he compared the Covid-19 downturn to that of the '1930's Great Depression' and the '1998 Asian Financial Crisis' economic collapse due to bubblelicious financial extravagance. The current pandemic struck hard and fast with escalating death figure that triggered 'social distancing,' 'lock down', and near zero physical social activities and business activities (except on-line business). With the amount of money injecting into the market through various stimulus packages, with fund managers holding US$591 billion waiting at the sideline, with dismal interest rate, it appeared possible that the bull is ready to run until someday we have reached the stage of 'irrational exuberance' as mentioned by Alan Greenspan during the bubble in the late 1990's where the Nasdaq Composite fell by 78%.


Friday, July 31, 2020

Notion Vtec Bhd (Rm0.815)

On Thursday Notion gained 9.5 sens or 13% with volume of 143 million which is about 28% of its total number of share of 505 million.

After the market closed, Notion informed Bursa Malaysia that the company has registered with the US FDA as a face mask manufacturer. The Edge published an article in the evening on Notion with headline 'Notion Vtec's face mask production unit registered with US FDA'. Click the headline for the original article.

Apparently on 9 April 2020, Notion informed Bursa Malaysia that the company has decided to venture into the production of personal protective equipment and medical ventilator components. Production was expected to commence by end of May 2020.

On chart Notion appeared to have completed its mega wave (1)-(2) from May 2017 to March 2020.

It took another 3 and a half months from May 2020 to end of June 2020 to complete its major wave 1-2. In July, Notion continued to form its wave (i)-(ii) and sub-wave i-ii that ended on 29 July with an OBV breakout.

On 30 July, Thursday, the last trading session of the week before the Hari Raya Qurban public holiday on Friday, Notion started the first candlestick of its sub-wave iii with a price breakout with very high volume of 143 million.

If Notion can continue its run next Monday with an anticipated heavy profit taking after the announcement, the 'buy on rumours sell on news' syndrome, and if the price can stay above the upper trend line for a positive close, the sub-wave iii will have a good chance to continue its journey North.

The Four Core Business Segments of Notion


Monday, July 27, 2020

Dawn Sky Kuala Lumpur - Venus and Orion

I saw the brightest object in the sky this morning at 6am, the Venus at 40 degrees above the north-eastern horizon.

At the same time I can see the unmistakable Orion constellation. Above the Venus is the red eye of the Bull (Taurus), Aldebaran.                           

Sunday, July 26, 2020

European Union - Reached Deal on 750 Billion Euro Stimulus Plan

German Dax (12,838)

European leaders, after a fractious summit that lasted 5 days agreed on a 750 billion stimulus plan for their coronavirus-hit economies on Tuesday morning.

The German Dax index after hitting a high of 13,313 on Tuesday, went into consolidation for the following 3 days and closed at 12,838 on Friday, a 3.5% drop from its Tuesday height.

Looking at its 30-year chart, Dax, after its sharp drop in March by 38% to complete the wave C of its mega wave (4), it has started forming its mega wave (5).

The shape of Dax's 6-Month chart looked very similar to that of Dow but is more bullish than the Dow in the sense that it has moved higher than its June's high whereas Dow is still unable to break its June's high. Dax is on its wave (v) of major wave 1 of its mega wave (5).

Dow (26,469)

Dow dropped another 182 points (-0.68%) on Friday after dropping 353 points on Thursday.

Both the Dax and the Dow appeared to move in an up-trend direction despite of the Covid-19 pandemic, plunging GDP and unemployment. The only explanation appeared to be the money printing by many countries. It is a liquidity driven market. The asset-bubble continues to grow. When will it pop?

Roubini said recently, "I expect a tepid recovery to eventually morph into a depression even more severe than the 1930s".

It may be good to be cautious and be alert to watch out for that bearish wave count until a stage it can be ruled out confidently. But be alert to notice signs that Dow is heading into this option.


Sunday, July 19, 2020

Dow (26,671) - Is mega wave (3) the only option?

Dow went to as high as 26,870 on Wednesday to knock out the wave B option and I am left with the mega wave (3) option.

Is Dow going to move from here with only one direction - all the way up? Can we forget about what Nouriel Roubini has mentioned in April - "The coming Greater Depression of the 2020s" ?

Click 'Depression of the 2020s' for the article by Nouriel Roubini, the 'Dr. Doom' that predicted accurately in 2006 the housing bubble crash of 2007-2008.

After going through the chart carefully, there is actually one possible bearish option that can support Roubini's bearish view.

From the February's historical high of 29,568, Dow dropped 38.4% with 9 waves along the way, that can be taken as major wave 1 of the super wave VIII.

The subsequent rebound to 27,574 by June can be taken as major wave 2. Dow then moved lower after that to form its wave (i) and since then has been forming its wave (ii) with a possible 100% retracement to 27,574 level.

This wave count will be ruled out once Dow moved higher than 27,574. That is another 903 points or another 3.4% away to rule out this bearish option.