Is KLCI ready to have a stronger run-up? Or is it going to go down all the way because of the low oil price, weak currency, 1MDB and the existing political situation?
I always believe that the chart pattern is the product of all the factors that affect the market, I don't really have to look into the implications of all the above mentioned issues. I just have to look at the chart and try to read it correctly.
Looking at the 20-year chart, I still like to maintain that KLCI has been forming its mega wave (5) since 2009.
So far, since 2009, it has completed its major wave 1-2-3-4 and is on course to complete its major wave 5 by 2017.
Since September 2015, it has completed the wave (i)-(ii) and sub-wave i-ii of its major wave 5.
In the first three weeks of March, very likely, if I am right, KLCI has completed the mini wave 1-2 and minor wave i-ii of its sub-wave iii.
I am looking for a breakout next week by the minor wave iii with high volume. In fact the volume has started to pick up on Thursday and Friday.
Berjaya Corporation Bhd (Rm 0.425)
BJCorp has been moving in a down-trend channel in the last 5 years since 2010 trying to complete the wave C of its mega wave (2).
If my reading is correct, it is forming the major wave 4 of its wave C.
There are two positive development on the chart. Its bottoms have started to flatten out and its OBV at its current price is much higher than its previous highs recorded in April 2015 and October 2015.
If the chart is well behaved, it is expected to complete its wave 4 rebound within the next 2 to 3 months before its final plunge to below 34 sens to complete its mega wave (2).
But for a stock that has been moving down-trend for 5 long years and has been pressed down for so long, there is always this possibility that the upward momentum can be so strong that the last down wave, the mega wave 5, can be missing. If this is going to be the case, then the 34 sens low recorded on 20th January will be its recorded historical low.
I personally considered BJCorp as a value-for-money stock with latest quarterly earning of 2.47 sens a share and net assets per share of Rm1.60.
Calvin Tan has been recommending this stock in the last few years, you can click to read his article 'Berjaya Corporation - The Berkshire Hathaway of Malaysia', written in September 2014 when BJCorp is around 50 sens. BJCorp is a good stock but it can be very frustrating for an investor to hold that stock at 50 sens from September 2014 until January 2016 to see the price to drop to 34 sens for a paper loss of 32%.
And if one is as rich as Warren Buffett or Calvin, one can always buy more BJCorp as its price goes lower and I believe ultimately one can be the final winner by holding on to his BJCorp.
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