FBMKLCI - I am uncomfortable.

Crude Oil WTI (US$49.59)

So far so good, crude oil continues with its major wave 4 formation. This is a monthly chart, one candlestick is one month. I am expecting at a a-b-c formation for this major wave 4. It may take 12 to 15 months to reach US$80.00.

Dow (17,873)

As I have mentioned previously, very likely Dow is forming its major wave (7). I am expecting more record breaking when wave (iii) starts. Dow may take another one to two weeks to complete its wave (ii).

However, if Dow failed to move higher in June, it is possible that major wave (5) marked the end of mega wave (1) and since May 2015, Dow has been forming its mega wave (2). If this is the case, wave C of (2) may bring Dow to 15,000 level or below.

FBMKLCI (1,637)

KLCI has been moving side way for too long ( because of 1MDB?) and the present wave form makes me a little uncomfortable. Is KLCI on course for its major wave 5 ? Or is it something else ?

Is it possible that the uptrend since 2009 has ended with a failure major wave 5 (a small and short 5) as shown below ? And KLCI is in its super wave (II) correction ?

Looking at the 5-year chart as shown below, if the 5-wave run-up from December 2014 to April 2015 is indeed a failure major wave 5, then the August 2015 low could be the wave (i) of super wave (II). The rebound from August 2015 to April 2016 could be the wave (ii) of (II).

From the 1-year chart, it is possible to have a a-b-c wave count for this wave (ii) of (II). Wave (ii) ended in April 2016 followed by 5 waves down i-ii-iii-iv-v to complete the sub-wave i.

If the rebound since 16th May 2016 is the sub-wave ii rebound, then the next down is going to be the sub-wave iii of wave (iii) plunge. It will break the 1620 level and then the 1600 level. Be very very careful, it is going to be fast and furious and can be very damaging, if this failure major wave 5 scenario is found to be the correct wave count.

Watch out for more damaging news on 1MDB from oversea.  


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BSI - In serious trouble

The Monetary Authority of Singapore (MAS) announced today that it has served BSI Bank Limited notice of intention to withdraw its merchant bank licence.

Click 'BSI' for more detail.

At the same time, Swiss financial regulators approved the dissolution of Lugano-based BSI Bank.

Click 'Swiss Financial Regulators' for the reports.

The storm is coming

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FBMKLCI - Is wave b rebound on the way ?

FBMKLCI (1,628)

KLCI has either completed its wave a of ii and its wave b rebound has started,

OR it has one more drop to go, the mini wave vii to complete its wave a.

EG Industries Bhd (Rm 0.84)

As I have mentioned previously, EG is curently forming its major wave 4. There is still a major wave 5 in front.

The main question here is whether EG has completed its major wave 4 ?

If EG can continue to move higher in the next few days, there is a high possibility that major wave 4 has ended in April and the next up is the sub-wave iii of wave (i) of its major wave 5.

Berjaya Corporation Bhd (Rm 0.365)

BJCorp has been moving down trend since April 2010. Has it completed its major wave C ?

There is a possibility that its major wave C has ended in August 2015 indicated by a reversal in its OBV.

The March 2016 price is lower than its October 2015 price but the March 2016 OBV high is higher than its October 2015 high.

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Bursa Malaysia Property Index

Property Index (1,154)

After reaching its high of around 1,520 in August 2014 and forming a double-top reversal pattern, the index has dropped to a low of 1,075 (-29%) by August 2015.

Within this 12 months of down trend, it has completed 5 waves, it is possible that the 1,075 low is the wave a of its major wave 2.

It is also possible that the index has taken another 8 months to form its wave (i)-(ii) and sub-wave i by April, 2016 (last month) and since then it is forming its sub-wave ii.

If my wave count is correct, property stocks is expected to move higher for about 8 to 12 months in tandem with the wave b of the property index, which is expected to gain about 25% in completing the wave b of its major wave 2.

Looking at the 20-year chart, wave c of 2 can bring the index to as low as 800 for a 40% drop. Houses should be quite cheap by then.

KSL Holdings Bhd (Rm 1.18)

KSL is in its major wave 4 correction. Watch out for the completion of its wave c of 4. Major wave 5 has a minimum target of Rm 2.35, which is top of major wave 3, to form a double-top reversal pattern.

However, if it can shoot over the top of its major wave 3 and go for a 230% gain, major wave 5 can go to as high as Rm 3.30 depending on the ending price of wave c of 4.

KSL Warrant-A will be expired by 18th August, 2016. Don't touch.

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Weekly Update

Crude Oil WTI (US$46.38)

As I have explained before Crude oil is forming its major wave 4 and it is expected to last for another 12 to 15 months.

There is this possibility that some other commodity may start to move higher together with crude oil.

Dow (17,535)

If Dow is forming its major wave (7) the current correction is likely to be its wave (ii).

 

If wave (ii) is a simple and shallow a-b-c then it may end within the next one to two weeks. But if it is going to be a complex wave, then it may last more than a month.

FBMKLCI (1,628)

KLCI is expected to continue with its sub-wave ii formation and its is not expected to complete in the near future. Hopefully it can hold above 1,600 level. Once it goes below 1,600, I will have to revise my current wave count for KLCI.

 

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V.S. Industry Bhd and Koon Yew Yin

On May 11, StarBiz featured an article "Investor Koon Yew Yin discloses stakes buy in Focus Lumber". The part that caught my attention is the disclosure related to V.S. Industry as shown below.

Between March 18 and April 11 he sold 44.08 million shares of VS Ind. His 8.8% stake before the disposal was 93.50 million shares. After the disposal, he still has 49.42 million shares.

The thing that puzzled me is that on 23 February he published and article telling his followers that he is buying VS. The price then is about Rm 1.30. Click 'VS Industry is a good buy' for the article. And then he started selling 47% of his stake at an average price of Rm 1.25 and below.

Why? Is it 'forced selling' due to margin call? Or is it an arranged 'passing over' of 44.08 millions share to another party through open market trading?

On last Friday, May 6, he published another article telling people that he is buying back VS at Rm 1.21 to 1.22. Click 'Why I am starting to buy back VS' for the article.

I just wonder whether he is a long-term investor or is just another speculator, a big one.

Looking at the 20-Year chart, VS was unable to complete the fifth wave of its wave C due to strong upward momentum (due to buying by Koon?). This failure C wave marked the end of VS's mega wave (2). The wave from 25 sens in September 2013 to Rm 1.68 in December 2015 can either be the mega wave (3) or the major wave 1 of its mega wave (3).

If Rm 1.68 is the end of mega wave (3), then VS is going to take another 4 to 5 years moving side-way to complete its corrective mega wave (4).

But if Rm 1.68 is only the end of the major wave 1 of its mega wave (3), then VS can be a very bullish stock. But I have no clue to the depth and duration of the current major wave 2 correction. Is it forming a base at around Rm 1.20? or is this the wave a of 2 and wave c of 2 is going to drop to 80 sens? I don't know. May be Koon Yew Yin has some information that we do not know.

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Weekly Update

Crude Oil WTI (US$ 44.61)

It appeared that wave (v) of 3 has shortened its journey and has already been completed. My expectation of one more down has vaporized.

If major 3 has only 5 waves and are completed, then the current up trend is likely to be the major wave 4 which has a potential target of US$ 80.00 within the next 12 to 15 months.

Dow (17,740)

It is quite clear by now that Dow has completed its sub-wave i and is currently forming its sub-wave ii of its major wave (7).

FBMKLCI (1,649)

KLCI is forming the wave a of its sub-wave ii. It has a potential low of 1,600. Next rebound is likely to be the wave b of ii.

Instead of looking at the stocks, it is advisable to watch out for the next explosive news from 1MDB.

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Big fish eats small fish

On 28th April, 2016, both the Boards of Directors of Karambunai Corp Bhd and Petaling Tin Bhd announced to Bursa Malaysia that they have received a notice of unconditional voluntary take-over offer from RHB Investment Bank Bhd on behalf of Chen Lip Keong (CLK).

For Kbunai, CLK offered to acquire the remaining 31.54% of Kbunai share at 5 sens a share (NTA 14 sens) and the remaining 68.47% of  Kbunai-Warrant C at 2 sen each. Click 'Kbunai's Offer Document' for details.

For Petaling Tin, CLK offer to acquire the remaining 38.53% of Petaling Tin at 24 sens a share (NTA Rm1.03). Click 'Petaling Tin's Offer Document" for details.

CLK's holding in Kbunai is 68.46% (direct) + 5.87%(indirect through FACB) = 74.33% and his holding in Petaling Tin is 65.07% (excluding treasury share).

CLK stated clearly in his offer document that he has no intention to maintain the listing status of both the companies irrespective of whether he can get 90% or more of the company's share. His game is simple, he just has to ensure that the public shareholding spread of 25% is not met, then both the companies will be automatically suspended by Bursa Malaysia. This may not lead to the de-listing of the companies but to the minority shareholders the impact is almost the same - you ended up holding shares that you cannot sell.

If there is another bigger fish wanted to buy over Kbunai and Petaling Tin from CLK, I believe he will not sell Kbunai and Petaling Tin for anything less than their respective NTA of 14 sens and Rm 1.03.

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