Dow (26,519) - Plunged 943 points (-3.4%)

Dow plunged 3.4% on Wednesday to 26,519 at the end of the trading session. Investors were worried about the new waves of Covid-19 that swept across Europe, US and other part of the world and the impact of further lockdown on businesses and economy. 

With this 943 points drop,there is this possibility that Dow is about to complete the wave C of its major wave 2 of the mega wave (3).

The next run-up can either be the major wave 3 or it can also be the wave D if the major wave 2 were to take the form of a complex A-B-C-D-E formation.

Daulat Tuanku

 

Dow (28,335)

If what Dow has formed in the last two weeks is a wave i-ii and if Dow can start to move higher next week, then this wave i-ii is very likely the sub-wave of (vii). A bullish formation and wave (vii) will likely to break Dow's previous record high and will begin another round of new record setting.

But even if Dow is going for a-b-c major wave 2 correction, the wave c of 2 is likely to end at a much higher level of 26,500 instead of the 24,971 level that I have mentioned previously because  the major wave 2 is a 'Flat a-b-c' formation.

As long as Dow stays below its previous record high of 29,568 the bearish super wave VIII option can not be ruled out yet unless the next major wave 3 can break the upper trend line and begin to set new record high. So the next major wave 3 run-up is very crucial.

FBMKLCI (1,494)

I still like to maintain my previous reading that KLCI has completed its wave (ii) in September and since then it has formed sub-wave i-ii and mini wave 1-2, hopefully with the issue of 'State of Emergency proposed by the PM' being objected by the Yang di-Pertuan Agong, the mini wave 3 can start to run next week.
 

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Dow (28,586) - Forms remained the same

Despite the 900 points gained during the week, my previous reading for Dow remained the same. It is going to remain the same until either it can break its previous record high of 29,568 or it goes below its wave (iv)'s low of 24,971.

 

 

 

 

FBMKLCI - Starting of wave (iii) ?

FBMKLCI (1,512)

KLCI added 12 points with moderately higher volume. It is possible that the 12 points green candlestick is the first candlestick of sub-wave iii of wave (iii). If KLCI can open with a 'gap' tomorrow and can put on another 10 points or more, then it is quite confirmed that sub-wave iii has started. For sub-wave iii of wave (iii), it is expected to be dynamic with high volume.

Fintec Global Bhd (Rm 0.09)

Fintec gained half a sen today with small volume. Looking at its 1-Year chart, this rebound is likely to be the mini wave vi of (ii).

The nature of business of Fintec I have covered in my past articles, I will not repeat here. 

At the end of August, Fintec reported a strong quarterly result for quarter ending 30/6/2020. Earning per share is 16.66 sens and net assets per share is 55 sens. 

Profit for the 3 months period of Rm151 million consists of Rm24.214 million from sale of marketable securities and Rm128 million from 'Fair Value gain' on investment securities.

The main contributor to the fair value gain of Rm128 million was its 25.3% holding (517 million shares) in Focus Dynamic Bhd. The share price of Focus improved from 68 sens at 31/3/2020 to 85 sens at 30/6/2020.

For quarter ending 30/9/2020, I have computed the fair value gain of all the investment securities of Fintec and it added up to a staggering Rm698 million. And again the main contributor is Focus with its share price improved from 85 sens at 30/6/2020 to Rm2.22 at 30/9/2020. Focus closed at Rm2.28 today.

With fair value gain of Rm698 million, Fintec is likely to announce an earning of around 50 sens a share and net assets per share of Rm1.00 for its quarter ending 30/9/2020.

Unlike glove stocks, where the earnings are all cash, solid cash, the earning of Fintec is from fair value gain - paper profit. The moment the share price of Focus drops from its current Rm2.28 to Rm0.85, all the fair value gain will just disappeared.

Dow (27,682) - Mega wave (3) or Super wave VIII?

Dow rebounded more than 500 points last week and given rise to the possibility that the September 24's low of 26,537 can either be the end of wave (vi) of major wave 1 under the mega wave (3) scenario where wave (vii) or wave (ix) will end much higher than the previous record high of 29,568.

 

Or it is the end of wave A of major wave 1. Under the mega wave (3) scenario the next wave 3 will go above the record level of 29,568.
 

Under the super wave VIII scenario where the wave (vii) is unable to go higher than the record 29,568 level to end as a seven-wave wave B of super wave VIII.

Or the next major wave 3 fails to cross the 29,568 level.

For the super wave VIII, its wave C is expected to pullback about 50%.