Inari & Insas - Higher degree correction

Inari Amertron Bhd (Rm 1.97)

Inari has a long red candlestick today and it ruled out my mini wave 6. With this 8 sens down, Inari is either forming its sub-wave ii

OR it is forming its wave (iv).

Insas Bhd (Rm 0.90)

With 3 red candlesticks in a row, even though it is unacceptable technically to have the highest volume for wave b, but it is wave b and wave c of sub-wave iv is in progress.

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Weekly Update

Crude Oil WTI (US$ 52.31)

From its weekly chart, it appeared to me that crude oil is going to have five waves for its wave c. Wave (iv) is going to end above US$ 60.00

Dow (20,656)

Dow is forming the sub-wave v of its wave (v). I expect Dow to complete this sub-wave v by late April or early May.

IF wave (v) has only five sub-waves (i-ii-iii-iv-v) and IF major wave 7 also has only five waves ((i)-(ii)-(iii)-(iv)-(v)), Dow is going to start its 15% pullback for its major wave 8 sometimes in May. All major world markets are expected to drop in tandem, including Bursa Malaysia, unless wave (v) or major wave 7 has more then five waves.

FBMKLCI (1,741)

As what I have mentioned previously, to tie in with Dow's 15% correction, it becomes possible that KLCI's current up-trend is the wave B of its mega wave (6). Wave C of mega wave (6) can have a similar 15% drop.

EG Industries Bhd (Rm 0.91)

Hopefully EG can complete its major wave 5 by early May.

Time is running out for EG, it has to complete its sub-wave iii, iv and v before KLCI starts its 15% correction.

Gadang Holdings Bhd (Rm 1.31)

Gadang is expected to complete its mini wave 3-4-5 within the next 3 to 4 weeks.

Inari Amertron Bhd (Rm 2.04)

Inari's current pullback is likely to be its mini wave 6. It still has mini wave 7, 8 and 9 to complete from now until May.

Insas Bhd (Rm 0.93)

Insas's candlestick and volume on Friday is a big disappointment to me. But it is still possible that Friday's candlestick is the minor wave iv.

But if Dow is going to drop 15% and KLCI is going to move in tandem with Dow, it is more likely that Insas is forming the wave b of its sub-wave iv even though it is not acceptable technically to have the highest volume for wave b.

With this wave count, Insas can move in tandem with the rest IF Dow and KLCI are going for a 15% correction.

BUT how sure are we that Dow is going for a 15% (3,000 points) drop in May?

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Insas Bhd (Rm 0.94) - It is minor wave iii

If the volume (11.4 million) is telling the truth, my bet is - Insas is forming its minor wave iii at the moment.

In technical analysis, we always believe that 'volume precedes price'. Today's volume of 11.4 million accompanied by an OBV breakout is a clear indication for minor wave iii. I have no doubt, BUT, in stock market, there is always this 'BUT' that always trouble me and keep me in suspense.

Earning Vs Price

I used to compile list of companies with good quarterly earnings and monitor their price movement with respect to each other. I arranged then in ascending order according to their latest earnings.

I started to buy using PE, NTA and chart pattern as a guide, and the one with my lowest ranking, JHM, is the star performer. What can I say. You still need player to play up the stock.

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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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Gadang & Insas

Gadang Holdings Bhd (Rm 1.32)

Finally Gadang has a strong green candlestick with high volume to mark the starting of sub-wave ix. In my previous posting I might have projected sub-wave ix with a 20% gain to end at Rm 1.50, but frankly speaking the last wave is always unpredictable. It can fall short or it can overshoot. To me it can end anywhere between Rm 1.35 to Rm 1.50.

Insas Bhd (Rm 0.905)

Insas formed a bullish engulfing pattern today with quite good volume. If Insas can move up strongly in the next few days, very likely it is forming the minor wave iii of mini wave 3 of sub-wave iii of wave (iii) of major wave 3. But volume must be high, very high because it is the iii of 3 of iii of (iii) of 3. It would be better if it could open with a gap.

However, if its price movement is not dynamic and volume is not impressive, very likely it is forming the wave b of sub-wave iv of wave (iii).

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Weekly Update

Crude Oil WTI (US$ 50.81)

Hopefully the April candlestick can confirm whether wave (iv) is on its way to above US$60.00 or it has already been completed.

Dow (20,663)

Very likely Dow is forming its sub-wave v of (v) of 7.

FBMKLCI (1,740)

KLCI is expected to begin its mini wave 9 next week.

EG Industries Bhd (Rm 0.90)

Hopefully EG can start its mini wave 3 of sub-wave v.

Gadang Holding Bhd (Rm 1.25)

Looking forward to Gadang's sub-wave ix next week.

Insas Bhd (Rm 0.89)

Insas is either on its mini wave 3 of iii

Or it is on its sub-wave iv.

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