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Thursday, March 9, 2017
Wednesday, March 8, 2017
Classical Behaviour
Gadang Holdings Bhd (Rm 1.23)
Gadang started to move higher again. At the close it added 6 sens (+5%) at Rm1.23.
Technically Gadang should continue to move higher. Hopefully it can open with a gap tomorrow, a run-away gap.
A typical bullish textbook case. An overlapping i-ii-iii-iv-v waves within a channel followed by a breakout and a subsequent pullback to rest on top of the upper resistance line before running away.
Gadang is forming its wave (v) that has 9 sub-waves. My target for wave (v) is Rm1.60.
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Gadang started to move higher again. At the close it added 6 sens (+5%) at Rm1.23.
Technically Gadang should continue to move higher. Hopefully it can open with a gap tomorrow, a run-away gap.
A typical bullish textbook case. An overlapping i-ii-iii-iv-v waves within a channel followed by a breakout and a subsequent pullback to rest on top of the upper resistance line before running away.
Gadang is forming its wave (v) that has 9 sub-waves. My target for wave (v) is Rm1.60.
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Monday, March 6, 2017
LBI Capital Bhd (Rm 1.21)
LBICap is a small property company with only 75 millions Rm 1.00 shares. Its only ongoing development project is in Section 14, Petaling Jaya comprising 11 units of bungalow lot. Nothing is interesting.
Its latest quarterly earning is only 0.01 sen a share. Net assets at Rm 1.71. With about Rm 5 million cash and Rm 26 million of borrow. Nothing is impressive.
But I find its chart technically quite interesting. LBICap has its peak in January 2014. Since then it has completed a 3-wave A, 3-wave B and by January 2017 it has completed another 3-wave down and started to rebound.
From its current level, I can see two possibilities.
The first possibility is as shown below, a 3-3-3-3-3 A-B-C-D-E consolidation. The current rebound is wave D that is likely to reach Rm1.50.
The second possibility is a 3-3-5 A-B-C formation.
The current rebound is wave 4 of C with likely target of Rm1.32. What is so interesting ?
The answer is its Warrant-A.
This warrant is going to expire on 17th April, 2018. Not much time left. Each warrant can be converted into 1 ordinary share at Rm 1.00 (Conversion price).
The interesting thing is that, at today's closing price of 18.5 sens for the warrant and Rm1.21 for LBICap, the warrant has a negative premium of 2.5 sens. For every one sen up for LBICap, I expect its warrant to move up one sen in tandem.
Even for the second possibility with wave 4's target of Rm1.32, 11 sens up for LBICap, a similar 11 sens up for the Warrant-A from 18.5 sens to 29.5 sens is 59% gain. This is interesting, right?
The next big question is, "will it move as what I have projected ?"
I hope it will, I pray that it will but I really don't know whether it will. In stock market, anything is possible. That is why the market can exist.
And to be frank, sometimes I too was caught on the wrong foot.
Its latest quarterly earning is only 0.01 sen a share. Net assets at Rm 1.71. With about Rm 5 million cash and Rm 26 million of borrow. Nothing is impressive.
But I find its chart technically quite interesting. LBICap has its peak in January 2014. Since then it has completed a 3-wave A, 3-wave B and by January 2017 it has completed another 3-wave down and started to rebound.
From its current level, I can see two possibilities.
The first possibility is as shown below, a 3-3-3-3-3 A-B-C-D-E consolidation. The current rebound is wave D that is likely to reach Rm1.50.
The second possibility is a 3-3-5 A-B-C formation.
The current rebound is wave 4 of C with likely target of Rm1.32. What is so interesting ?
The answer is its Warrant-A.
This warrant is going to expire on 17th April, 2018. Not much time left. Each warrant can be converted into 1 ordinary share at Rm 1.00 (Conversion price).
The interesting thing is that, at today's closing price of 18.5 sens for the warrant and Rm1.21 for LBICap, the warrant has a negative premium of 2.5 sens. For every one sen up for LBICap, I expect its warrant to move up one sen in tandem.
Even for the second possibility with wave 4's target of Rm1.32, 11 sens up for LBICap, a similar 11 sens up for the Warrant-A from 18.5 sens to 29.5 sens is 59% gain. This is interesting, right?
The next big question is, "will it move as what I have projected ?"
I hope it will, I pray that it will but I really don't know whether it will. In stock market, anything is possible. That is why the market can exist.
And to be frank, sometimes I too was caught on the wrong foot.
Sunday, March 5, 2017
5th March 2017 is JINGZHE 驚蟄
Jingzhe 驚蟄, the third solar term, means the awakening of the hibernating insects. Jingzhe
marks the starting of warmer weather accompanied by rain and thunder. In
ancient China, the farmers would start to prepare the farmland to begin their
year long agriculture activities.
Whatever living things that are hibernating underground, if they do not wake up by the warmer weather, rain and thunder, they will ultimately be wakened up by farmer ploughing the field.
In Southern China especially the Guangdong Pear River delta region and Hong Kong, Jingzhe is the day to pacify the 'white tiger' 祭白虎 using a piece of raw pork and to beat the 'villians' 打小人 with a shoe.
After performing these rituals, there will be a year of smooth sailing, peace and good luck.
Weekly Update
Crude Oil (WTI) (US$53.23)
Crude oil is expected to complete its wave (iv) rebound to around US$62.50 before end of this year. Wave (v) might bring the oil price to US$25.00. Crude oil is currently forming its mini wave 4.
Dow (21,005)
Dow has started its mini wave 4 of sub-wave iii.
FBMKLCI (1,708)
As mentioned in my earlier post, KLCI is either forming its sub-wave iv.
Or it is forming its mini wave 7. Whatever options, its trend for the next few months is up, up and up with some small corrections along the way.
Gadang Holdings Bhd (Rm1.19)
Gadang added 7 sens (+6.25%) on Friday and it managed to break its upper resistance line with fairly high volume, a bullish sign. An overlapping i-ii-iii-iv-v waves followed by a breakout is a 'must buy' for me. A classical pattern is a breakout followed by a pullback to rest briefly on top of the resistance line - last chance to buy before it flies. This pullback may not take place if the uptrend momentum is too great.
Gadang has completed its mega wave (1)-(2) and major wave 1-2. At this moment it is forming the wave (v) of major wave 3. Advisable to get out at the end of wave (v) as the major 4 correction can be as high as 40%. My target for wave (v) is Rm 1.60.
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Friday, March 3, 2017
What can we say.
He is right. He is not lying. Saudi Arabia announced the increase in price for its higher-grade unleaded petrol from 0.6 riyals to 0.9 riyals per litre in December 2015. A hike of 50%.
At current exchange rate of 0.27 US$ to 1 Riyal, the increase was from US$ 0.162 to US$ 0.243 a litre.
And at Rm 4.45 to 1 US$, the price of higher-grade unleaded petrol in Saudi was Rm 1.08 a litre in 2016. This politician quoted a Dec 2015's news and compared it with our last month price hike and he 'forgot' to compare the current petrol price between Saudi's Rm 1.08 a litre with our lower grade Ron 95's of Rm 2.30 a litre.
On 27 February 2017, Gasoline prices for some of the oil producing countries are as shown.
For March 2017
Our Ron 95 is Rm 2.30 a litre and higher grade Ron 97 is Rm 2.60 a litre. Prices remained unchanged from February. No increase, so no complaint from the public. Ah Jib is happy.
Actually if the computation was based on average monthly price, March's petrol price should increase. Most likely because of the strong protest from the public (we made a fuss) in February when both the prices for Ron 95 and Ron 97 were increased by 20 sens, the authority decided not to increase the price. Anyway nobody know how the 'black box' worked.
If the computation was based on monthly closing price, the prices for March should decrease.
Looking at the March's candlestick, if the crude oil price can maintain at the current level until end of March, our April petrol prices can be expected to drop.
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Wednesday, March 1, 2017
FBMKLCI and EG
FBMKLCI (1,697)
KLCI rebounded by about 4 points today. Going by my previous wave count for KLCI that the current correction is the sub-wave iv, then this rebound is likely to be the wave b of iv.
However, if KLCI can continue to move higher from here in the next 8 to 10 days, then the last pullback is the mini wave 6. The current run-up can be the mini wave 7 of sub-wave iii.
EG Industries Bhd (Rm 0.885)
I still believed that EG has completed its major wave 4 and is on its major wave 5.
It has just reported an improved quarterly earning of 3.6 sens a share. Net assets per share is Rm 1.24. EG managed to improve its earnings over 3 consecutive quarters from 2.3 sens to 3.38 sens and to 3.6 sens corresponding to improved quarterly revenues from Rm 150 millions to Rm 234 millions and to Rm 259 millions.
With the 2 days of unexpected drops after announcing its improved quarterly earning, I need to modify my wave count slightly as shown.
The pullback until yesterday became a higher degree sub-wave iv correction. EG is likely to continue to move higher in the next two weeks to form its sub-wave v of wave (i).
There is another possible wave count for EG if the October low is not the end of its major wave 4.
If the major wave 4 is a a-b-c-d-e-X-a-b-c formation, then the end of major wave 4 is in November instead of October. Under this condition, its February high becomes the sub-wave i. Then the worst scenario for EG can be a 100% retracement for sub-wave ii to 82 sens. Looking positively, we have another chance to buy EG at October low of 82 sens.
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KLCI rebounded by about 4 points today. Going by my previous wave count for KLCI that the current correction is the sub-wave iv, then this rebound is likely to be the wave b of iv.
However, if KLCI can continue to move higher from here in the next 8 to 10 days, then the last pullback is the mini wave 6. The current run-up can be the mini wave 7 of sub-wave iii.
EG Industries Bhd (Rm 0.885)
I still believed that EG has completed its major wave 4 and is on its major wave 5.
It has just reported an improved quarterly earning of 3.6 sens a share. Net assets per share is Rm 1.24. EG managed to improve its earnings over 3 consecutive quarters from 2.3 sens to 3.38 sens and to 3.6 sens corresponding to improved quarterly revenues from Rm 150 millions to Rm 234 millions and to Rm 259 millions.
With the 2 days of unexpected drops after announcing its improved quarterly earning, I need to modify my wave count slightly as shown.
The pullback until yesterday became a higher degree sub-wave iv correction. EG is likely to continue to move higher in the next two weeks to form its sub-wave v of wave (i).
There is another possible wave count for EG if the October low is not the end of its major wave 4.
If the major wave 4 is a a-b-c-d-e-X-a-b-c formation, then the end of major wave 4 is in November instead of October. Under this condition, its February high becomes the sub-wave i. Then the worst scenario for EG can be a 100% retracement for sub-wave ii to 82 sens. Looking positively, we have another chance to buy EG at October low of 82 sens.
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