Following a massive sell-off in March as the Covid-19 pandemic swept across the whole world, global markets have been surging despite disastrous economic consequences. It appeared to me that markets are purely driven by excessive liquidity, speculation and the momentum created by some situational sectors and stocks. At times it appeared a little bubblish.
FBMKLCI (1,578)
Bursa has a broad-based retreat on Friday. KLCI dropped about 10 points with record volume of 27 billion. Losers out-numbered gainers by 794 to 435.
Based on its long-term chart, KLCI has been forming its mega wave (7) since setting its low of 1,219 in March 2020.
From its 19 March's low of 1,219 KLCI has gained about 30%. At this moment KLCI is forming its sub-wave iii of (iii) of its mega wave (7).
Dow (27,433)
Dow managed to move above and stay above 27,000 in the last few trading days to further enhance its bullish scenario. Dow is at its sub-wave iii of wave (v) in its mega wave (3) formation.
EG Industries Bhd (Rm0.615)
EG encountered heavy profit taking on Friday. It dropped 7.5 sens or 10.8% to Rm0.615. Based on candlestick, EG was on its wave (iii). If EG continues to move lower next week, then its last Tuesday high of Rm0.83 marked the end of the mini wave 5 of its wave (iii). EG is likely to drop to Rm0.52 to complete its wave (iv).
But if EG can move higher next week, then the Friday sharp drop to 61.5 sens is the mini wave 6, wave (iii) will have 9 mini waves under this condition. Wave (iii) is likely to end around Rm1.20 or 270% (1.618x167%=270%).
EG's Monday movement is crucial to confirm whether its wave (iii) has already ended Rm0.83 or it will end much higher at Rm1.20.
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How is the gold chart doing? The last high has been surpassed, so the C wave down is nullified too? Thanks
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