Insas (Rm 0.93) - D-Day tomorrow

Insas continued to move higher today. At the close of the trading session it added another 2.5 sens with 5.90 million shares traded. The volume is much higher than yesterday's volume of 1.36 million.

Based on volume, it is more likely at this juncture that Insas is forming the minor wave iii of its mini wave 3 of sub-wave iii of wave (iii). I expect Insas to form a stronger candlestick tomorrow with volume of 8 to 10 million.

However, based on its current wave form, I still cannot rule out the possibility that it is forming the wave b of its sub-wave iv. Under this scenario, Insas is likely to touch 0.94 tomorrow in the morning, most likely at the opening bell, to be followed by steady decline with shrinking volume and is likely to close in the red.

But it really doesn't matter whether the short-term movement is minor wave iii or wave b of sub-wave iv if we are looking for the completion of its mega wave (5). With a similar 200% gain as mega wave (1) and (3), the target is Rm 1.80 for Insas and Rm 0.80 to Rm 0.90 for Insas-WB. The conversion price for Insas-WB is Rm 1.00.

But, wait for a minute, according to Elliott wave principle, one of the advancing waves has to be an extended wave. If mega wave (1) and (3) gained a more or less similar 210%, it is possible that mega wave (5) is the extended wave. Using Fibonacci ration of 1.618, mega wave (5)'s gain can be 1.618x200% = say 320%.

Then the theoretical target for Insas becomes Rm 2.50 and for Insas-WB the target becomes Rm 1.50, without any premium.

But, please don't get carried away, it is always wise to keep a cool mind. As I have said before, anything can happen in stock market. Insas can have a failure mega wave (5), if Dow started to plunge. Insas can also have a U-turn anytime for any reason or no reason just like Dow that opened Wednesday's trading strongly with close to 200 points gain but had a U-turn in the afternoon and closed with 41 points in the red after FOMC Minutes mentioned that some Fed officials were worried about high equity valuations.

There is another possible wave form for Insas that I did not mention all these while, because I considered it as unlikely. A wave B of mega wave (4) formation.

Unlikely because, with this form, mega wave (4) is out of proportion with mega wave (2) in both duration and magnitude. A failure mega wave (5) corresponding to a plunge in Dow is more acceptable to me.


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