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

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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.                           

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.

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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.

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Dow (26,642) - Can wave B scenario be ruled out now?

Dow added 556 points (+2.13%) on Tuesday to close at 26,642 level, that is 349 points above my critical 26,293 level to rule out the wave B scenario.

After looking at the latest wave form, there is still a last possibility for wave B as shown below, a diagonal wave c to end the wave (ii) of C. 26,800 should be the last level to keep the wave B scenario alive. that is a mere 158 points away. At this moment the Dow future is in the green. +281 points at 26,772, almost reaching 26,800.

If Dow can close well above 26,800 on Wednesday then the seemed to be impossible mega wave (3) scenario does look possible.

By that time I will need to look at another likely wave form besides the mega wave (3) option. A fact is, for the market to exists, there must be buyers and sellers at the same time with opposite opinions.

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Dow (26,075) - Crucial week ahead.

Wave B scenario

I mentioned last week, "Dow is about to complete the wave (ii) of its wave C of VIII. If Dow starts to move lower and drops 1,000 points to go below 25,000 level , then Dow is heading for 17,000 level to complete its super wave VIII."

Dow was very well behaved on the first four days of the week. It surged 460 points to complete the wave (ii) of C of VIII. It started to move lower on Tuesday by dropping 397 points. A small technical rebound of 177 points on Wednesday followed by 361 points drop on Thursday. When Dow future dropped more than 200 points before Friday's trading I was preparing for a possible 'Black Friday'. But instead of an anticipated plunge, Dow rebounded 369 point. This 369 points rebound could be a game changer - it effects a significant shift in my probability assignment to my various wave counts. Next week price movement becomes crucial.

Looking at the 15-minute interval chart as shown below, wave (ii) was completed on Monday and wave (iii) of C has started with mini wave 1 that ended on Thursday. Along wave C scenario of wave count, Friday's rebound has to be the mini wave 2. The maximum magnitude for mini wave 2 is a 100% retracement to 26,293 - Monday's wave (ii) closing price. That was only another 218 points up. Anything more than that will nullify my wave count of wave (i)-(ii), 1-2 of C of VIII.

But if Dow fails to go higher than 26,293 and instead it goes south and drops below the low of mini wave 1 of 25,536 then that is going to be the mini wave 3 of (iii) of C of VIII.

Mega wave (iii) Scenario

The 369 points gained on Friday has greatly improved the probability of this scenario despite the miserable outlook for Covid-19 pandemic, dropping GDP, business bankruptcy and miserable unemployment figures worldwide.

If Dow can continue with its Friday's momentum and break the 26,293 level, then mini wave 3 of its wave (v) of major wave 1 of mega wave (3) is on its way.

Do remember, besides these two wave counts, there are many other possible alternative wave counts as Dow slowly reveal its prices with time. Whatever wave counts proposed can be right or wrong but Elliott Wave Principles cannot be wrong as the final wave form can always fit into one of its principles.

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Gold Future (US$1,806/oz)

In my previous article I mentioned that "gold is approaching its 2011 September high of $1,794/oz", actually in 2011 September the intra-day record high is $1,911 and the price dropped to only $1,620 at the end of the month. The closing record high was $1,828 at the end of August 2011. Sorry for the mistake made.

Currently gold future is at $1,806, to date the Candlestick for July is a 'doji', which is bearish. But July has another 22 days to go, the July candlestick at the end of the month can be something else unless the gold price continues to fluctuate around this level for the next 22 days. If by the end of July the candlestick were to remain as a 'doji', it is possible that the wave B of (4) has ended.

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Dow (25,827) - Wave (ii) of C formation

Dow is about to complete the wave (ii) of its wave C of VIII. If Dow starts to move lower in the coming week and if it drops 1,000 points to go below the 25,000 level, then Dow is heading for 17,000 level to complete its super wave VIII.

But from its current level, if Dow can continue to move higher next week for another 1,000 point, then the unlikely mega wave (3) scenario can become a reality.

Gold (USD1,787 per oz)

Gold is approaching its 2011 September high of US$1,794 per ounce. The current run-up is likely to be the wave B of its wave (4).

Is there any correlation between the Dow and the gold price movement? From the following chart one can see that from the price movement of Dow and gold from 1970 to present, there is no obvious relationship between the two of them (the red line (Dow) and the yellow line (Gold))

Focus Dynamics (Rm1.05) Vs Fintec Global (Rm0.075)

Focus Dynamics added 5 sens on Friday to close at its record high of Rm1.05 with 11.6 million share traded. Fintec Global that holds 514.9 million shares of Focus gained 0.5 sens on Friday to close at Rm0.075 with 74.6 million shares traded. Even though in every one Fintec share there is 0.53 share of Focus that worth 55 sens but Fintec share price in the last few years has hardly move despite the share price of Focus has moved from 5 sens in May 2017 to last Friday high of Rm1.05.

A comparison of the price movement (appreciation) in the last 5 years shows a 2,424% difference in price appreciation between the two from May 2017 to July 2020.

For quarter ending 31/3/2020, Focus earning per share (EPS) is 0.04 sens and Net Assets/shares is 2 sens. For Fintec, EPS is 8.29 sens and Net Assets/share is 51 sens, contributed mainly by fair value gained of its investment holdings during the period.

Besides Focus, Fintec also holds shares in Vsolar, Netx, AT(S), DGB, Mlabs, Komark, Seacera and TNB.