Dow - Watchout for c of iv

Dow (17,798)

Dow remained on wave b of its sub-wave iv. The next c of iv may drop 800 points

FBMKLCI (1,682)

KLCI moved side way within a narrow range in the last 5 trading day. My reading for KLCI is the same as last week.

Insas Bhd (Rm 0.77)

Insas dropped 6.5 sens (7.7%) on Friday after it has reported losing 4.38 sens a share for its latest quarterly earning.

Looking at its last 5 quarterly earnings, erratic is the word.

The main contribution from item 'Other Income' was gain on disposal of quoted securities that can fluctuate between Rm 7 million to Rm 44 million.

For item 'Other Operating Expenses', main contributors are gain/loss on foreign exchange and fair value gain/loss of financial assets.

It is very difficult to project its next earning. I have to go back to the chart to guess its possible movement.

From the long-term 10-year chart, my guess is that Insas is on its major wave 5. It has completed its wave (i) of 5.

 

Insas is currently forming its wave (ii). It can either be a simple a-b-c as shown below or a-b-c-d-e. It can also be something else. Need to wait for it to reveal further.

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Insas losing 4.38 sens a share

Insas Bhd (Rm 0.835)

After the market has closed, Insas reported losing 4.38 sens a share for its latest quarter ending 30 September.

Comparing with the previous quarter, its revenue dropped by 50%, 'other income' dropped by 65% and share of profit of associate dropped by 85%. The most damaging item is 'other operating expenses' where Insas recorded a negative Rm 48.9 million. Further checking revealed that Insas incurred losses of Rm 10 million on foreign exchange and Rm 27 million on loss of fair value of financial assets.

I expect its share price to be quite volatile tomorrow. I shall wait for the dust to settle before reviewing its 6-month chart. Its longer term chart should remain the same.

It has completed its major wave 1-2-3-4 and is currently forming its major wave 5.


Datasonic Group Bhd (Rm 1.60)

Instead of giving me another green candlestick, Dsonic gave me a bearish red engulfing candlestick. It is forming the wave c of (ii).

If it can move up tomorrow, then it is a running a-b-c. If it continues to move lower, then it is an expanding a-b-c.

The above reading is based on the assumption that Dsonic has completed its major wave 2.

However, if it continues to move lower in the next few days and it goes below Rm 1.50, then there is this possibility that Dsonic has not yet completed its major wave 2, which is taking the form of a a-b-c-d-e-X-a-b-c, a complex major wave 2. 

EG Industries Bhd (Rm 0.825)

EG has broken its uptrend with 3 consecutive down candlesticks. Since its previous uptrend from 78 sens to 88 sens has only 3 waves, it has to be wave b of (iv).

After 3 days of consolidation, if EG can start to move higher again tomorrow, then it is a running a-b-c wave (iv).

If EG continues to move lower, then it is likely to be an expanding a-b-c wave (iv). It may reach 76 sens to complete its c.

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Dsonic And Insas

Datasonic Group Bhd (Rm 1.66)

Dsonic managed to break the Rm 1.65 level but closed only one sen above that level, not that convincing. One more green candlestick would seal Dsonic last chance of turning back. Sub-wave iii has to be more dynamic than sub-wave i. At least its volume must exceed that of i.

Insas Bhd (Rm 0.83)

Insas is forming the wave c of viii.

Since Inari has reported a much better quarterly result, its higher contribution should pave the way for Insas to report an earning much higher than its previous quarter of 5.07 sens.

Even with its previous earning of 5.07 sens a quarter, net assets of Rm 1.91, par value of Rm 1.00 and 0.322 share of Inari (worth  Rm1.30) in it, I see no logic why it is at Rm 0.83. Unless it is going to announce a horrible quarterly earning within the next few days before end of November.

The threshold for triggering a mandatory offer is 33% and not 30% that I have mentioned previously. Based on Thong Kok Khee's announcement to Bursa Malaysia on 25/11/2015 its holding is 32.73%. I don't expect much selling from him for reason of triggering a mandatory offer. If he were to continue his selling, then it must be for some other reason.

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Datasonic Group Bhd (Rm 1.63)

If Dsonic can move above Rm 1.65 with high volume tomorrow, it is going to be the star for the next few weeks. A breakout above Rm 1.65 will confirm the formation of sub-wave iii of wave (i) of major wave 3.

If major wave 3 has the same magnitude as that of major wave 1, the minimum target is Rm 2.40.

If Dsonic goes lower instead of higher tomorrow, then it is forming a small a-b-c sub-wave ii.

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EG Industries Bhd (Rm 0.865)

It is sub-wave v. EG added 4.5 sens with high volume on Monday.

If sub-wave v of wave (iii) were to have the same magnitude as sub-wave i, 87 sens is the end. But if it were to have the same magnitude as sub-wave iii, then a possible target is Rm 1.00.

Looking at longer term, EG is currently at sub-wave v of wave (iii) of major wave 3. There is a long journey in front until the completion of its major wave 5.

I am assuming my reading is correct and I hope I am correct. I am usually bullish biased and quite often get carried away like in the case of KSL on its way up until the day when it did not move along my bullish projection. Then I have to chop and get out.
 
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Weekly Update

Dow (17,823)

If Dow moves lower next week, it is likely that it is forming its wave c of (iv).

But if Dow continues to move higher and higher next week, then it is the bullish sub-wave iii of (iii).

FBMKLCI (1,661)

KLCI is either forming the mini wave 7 of iv

Or it is forming the wave b of (ii). Nothing to worry.

Datasonic Group Bhd (Rm1.60)

If Dsonic continues to move higher, it is sub-wave iii, very bullish.

If it moves lower, then it is a higher degree wave (ii) correction.

EG Industries Bhd (Rm0.82)

EG is at the tail-end of its major wave 3. I don't know how high it can go. Your guess is as good as mine. It is up to 'them'. But OBV is indicating net selling - distribution.

Technically, EG is either forming its wave (iv) at this moment.

If 'they' continue to push it higher next week, then it is the sub-wave v of wave (iii).

Felda Global Ventures Holding Bhd (Rm1.84)

Very likely FGV is forming the wave b of (2).

Inari Amertron Bhd (Rm4.14)

Inari will be forming the sub-wave vii, viii and ix of its wave (iii) in the next two weeks.

Insas Bhd (Rm0.85)

Insas, if moving side way next week, it is forming its sub-wave viii

However if Insas can move up strongly next week with high volume, then it is forming the mini wave 3 of sub-wave vii.

Most probably it is trying to catch up with Inari. It has been left too far behind Inari. Its 0.322 share of Inari per share of Insas alone is worth Rm1.33.

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Datasonic Group Bhd (Rm 1.61)

Dsonic is involved in the provision of ICT solution (including the smart card personalisation such as secure ID, chip based credit/debit/bank cards), customisation of software and hardware solution, and provision of others ICT related technical consultancy services.

It was a fantastic stocks in 2013/2014.

In 2013/2014 there was a 1 for 2 bonus issue, a share split of one 50 sen share into five 10 sens share and another 1 for 1 bonus issue. From early 2013 one 50 sen Dsonic share at Rm 2.00 becomes fifteen 10 sen share and its price went as high as Rm2.40 by April 2014. The gain is 1700%. Fantastic.

Since April 2014, it went into a 16 months consolidation until mid-August 2015 to complete its mega wave (2). A complex A-B-C-X-A-B-C formation.

From mid-August to early October, Dsonic has completed a 5-wave major wave 1. Then it took another 6 weeks to completed its a-b-c-d-e major wave 2.

At today's trading, Dsonic gained 10 sens (+6.6%) with a high volume of 17.8 millions shares. It is possible that the wave (i) of its major wave 3 has started.


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Inari Amertron Bhd - Upper resistance broken

Inari Amertron Bhd (Rm 4.06)

Inari added 16 sens (+4.1%) today and managed to stay above its upper resistance line

In fact, if we look at the bar-chart, Inari has already moved above its upper trend-line on Friday. It dropped back on Monday to rest on the trend-line and today it pulled further away from the trend-line.

Today's candlestick is the mini wave 7 of its sub-wave vii.

Insas Bhd (Rm 0.86)

I have adjusted my wave count for Insas so that it is moving in tandem with Inari, keeping in mind that in every Insas share there is 0.322 Inari share. At today's closing price of Rm 4.06 for Inari, this 0.322 share alone is worth Rm1.30

From its long-term chart, Insas is forming its major wave 5.

I am definitely happy that Inari is at Rm 4.06 but I don't understand why it can reach Rm 4.06 while Insas is at Rm 0.86.

Is it possible that the depressed price is due to the consistent selling by Thong Kok Khee, who has to reduce his stake to less than 30%.

Based on his announcement yesterday, after selling off another 900,000 shares on Friday he is still holding 32.9% of Insas. He still has to sell off another 19.3 million shares.

FACB Industries Incorporated (Rm 1.14)

Facb is comparatively active today with 520,000 shares traded. It added 6 sens (+5.56%). It is forming its sub-wave iii of wave (iii).

Looking at its long-term chart, hopefully mega wave (4) is completed and it is forming its mega wave (5).

This is a stock that has been moving like a tortoise despite the fact that there is a net cash of Rm 1.76 for every Facb share, and there are 4 Kbunai shares inside each Facb share. For quarter ending 30th June, its quarterly earning per share is 2.05 sens with net assets at Rm 2.45 a share.

I think its owner, Dr. Cheng Lip Keong, the No. 24 richest man in Malaysia (Forbes ranking), must be very busy with his NagaCorp casino operation in Phnom Penh, Cambodia.

He must also be very busy over his NagaCity Walk Project that has been scheduled to open by end of this year.

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Felda Gobal Ventures (Rm 1.77)

FGV was unable to hold above Rm1.82 level on Monday. It dropped 5 sens to close at Rm1.77.

With this drop, it is confirmed that FGV is forming the wave a of its wave (2).

If wave b gives it a 'Head & Shoulders' formation, then the subsequent wave c may bring it to Rm1.40 or lower.

Dow (17,482)

Wave b of iv has started.

Global equities were boosted on Monday when it was reported that Japanese third quarter GDP contracted by 0.2% quarter-over-quarter. The markets expect more monetary support from the Bank of Japan.

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Weekend Update

Crude Oil (WTI) (US$40.74)

With oil prices setting new weekly low, my previous wave count can no longer hold and has been revised as shown.

Mini wave 5 of sub-wave v is in progress.

Dow (17,245)

Sub-wave iii is completed and sub-wave iv is in progress. But be very careful if iv goes below the top of sub-wave i, then the current correction can no longer be iv.

FBMKLCI (1,658)

KLCI is either forming wave c of iv,

Or it is forming the c of ii.

LCTH Corporation Bhd (Rm0.815)

Wave (v) of major wave 3 is about to end.

Felda Global Ventures Holding Bhd (Rm1.82)

If Rm1.82 support can hold, wave (v) of major wave 3 rebound may start anytime from now.

However, if Rm1.82 level cannot hold, it is more likely that FGV is forming the wave a of mega wave (2).

Inari Amertron Bhd (Rm3.97)

Inari announced an improved quarterly earning of 6.24 sens a share, a special dividend of 0.50 sen a share, a first interim dividend of 2.30 sens a share and a 1 for 4 bonus issue. It added 15 sens on Friday.

If Inari is not able to break its upper resistance line, mega wave (1) is likely to have ended.

However if Inari can punch through its upper resistance line, then the current up-trend is the wave (iii) of its major wave 3.

Insas Bhd (Rm0.865)

I hope the current up-trend is its major wave 5.

EG Industries Bhd (Rm0.80)

EG is at the tail-end of its major wave 3. The heavy selling on Wednesday and Thursday upon the listing of new shares (right-issue) on Wednesday sent the OBV into bearish territory, sign of distribution.

EG is forming its wave (iv) currently if I am right.

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