Poh Huat Resources Holdings

Dow (17,895)

Dow gained 259 points (+1.47%) on Thursday, this is either the mini wave 2 of d of (xiv)

Or it is the starting of mini wave 3 of sub wave iii of wave (xiii) if Dow can break its upper resistance line.

FBMKLCI (1,786)

It is possible that KLCI is forming its wave b of mini wave 2. This wave b may last another 3 to 5 days.

Poh Huat Resources Holdings (Rm 2.30)

Poh Huat is in the business of manufacturing and selling of timber furniture and other related products for local as well as oversea markets.

It has reported an earning of 10.35 sens a share for its quarter ending 31st October 2014. It has to announce before end of March its quarterly earning for its latest quarter ending 31st January 2015.

Its stock price might have moved up very substantially from below 40 sens to Rm 2.30 in the last 2 years but if its quarterly earnings can be maintained at well above 10 sens due to cheap rubber wood and weak Ringgit, I would expect it to move higher in tandem with its earning.

Chart wise it is forming its major wave 3 currently.

So far its has completed its sub-wave i, ii, iii and iv and it is at the starting of its sub-wave v of its wave (i) of major wave 3.

If it can report an earning of 12 to 15 sens a share, sub-wave v should have no problem to reach Rm 3.00.

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Lee Swee Kiat surged 40%

FBMKLCI (1,778)

KLCI is forming the wave a of its mini wave 2. I am expecting a wave b rebound.

Lee Swee kiat Group bhd (Rm 0.315)

Leesk gained 9 sens or 40% to close at 31.5 sens. The surge really caught me by surprise, as I have expected a 3 to 4 days of consolidation to complete its mini wave 4. With this surge, the one day correction can no longer be considered as mini wave 4, it is more likely to be a lower degree minor wave ii of mini wave 3 as shown.

 

The 9 sens surge with record volume is the minor wave iii of mini wave 3 of sub-wave iii of wave (iii).

Looking at the 10-year chart, it is the minor wave iii of mini wave 3 of sub-wave iii of wave (iii) of major wave 3 of mega wave (3). The 40% surge is fully justified.

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Dow - wave e of (xiv) ?

Dow (17,662)

Dow dropped 332 points (-1.85%) on Tuesday. It is more likely that Dow is forming the wave e of (xiv).

Wave e may end around 17,300 level. It may fall short or it may over-shoot but I don't expect it to go lower than 17,000.

Lee Swee Kiat Group Bhd (Rm0.225)

LeeSK, a comparatively smaller company, engages in manufacture, trading, distribution and marketing of furniture, natural latex foams mattresses and polyurethane foams for automobile industries in Malaysia and US.

With low crude oil price, cheap latex and weak Ringgit, I expect its earning to improve further in the next 4 quarters in 2015.

On a quarterly basis, its revenues are Rm16.8 million, 17.8 million, 18.2 million and the latest 22.2million with earning per share of 0.36 sens, 0.32 sens, 0.63 sens and the latest 1.14 sens. I hope it can earn more than 2 sens for its next quarter ending 31st March.

More important, its chart looked extremely good.

It is forming the wave (iii) of 3 of (3) and it has a 'double-bottom' and an 'inverted head and shoulder' reversal patterns.

Its recent surge is likely to be its mini wave 3 of sub wave iii of its wave (iii). It is forming its mini wave 4 at this moment. I don't expect it to go below 21 sens.


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Weekly Review

Dow (17,856)

My reading on Dow remains the same. It is either at the last leg of wave (xiv) correction.

Or it is forming the sub-wave iii of its wave (xiii).

FBMKLCI (1,806)

No change to my reading for KLCI. It is forming its major wave 5 which is expected to last until January 2017.

KLCI might have completed its mini wave 1 and is forming its a-b-c mini wave 2.

KSL Holdings Bhd (Rm 2.20)

No change to my previous reading. It is either at the wave c of its major wave 4.

Or it is on its way to complete its wave (v).

1MDB

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KSL Holdings Bhd - Continued to drop.

Option 1 - Major wave 4

KSL continued to drop despite announcing a good 4th quarter result. If KSL continues to move lower, it is more likely that the side-way movement in the last few months is the major wave 4. The current down trend is the wave c of 4. Wave c may drop to Rm 1.70.

After completing the current major wave 4 correction, there is still a major wave 5 to go.

Option 2 - Mini wave 2

If KSL can hold above Rm 2.05 and starts to move higher, it is still possible that the current drops is the mini-wave 2 of sub-wave iii.

This is a more bullish option - possible but not so likely.

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KSL Holdings Bhd

KSL dropped 16 sens or 6.8% to close at Rm 2.19 on Friday before the announcement of its 4th quarter result.

Subsequently after the market closed, KSL announced a 4th quarter earning of  Rm127.8 million or a quarterly earning of 24.85 sens per share based on weighted average number of share of 522 millions.  It also announced a total earning of 80.65 sens a share for 2014.

However, if we divide the net profit Rm 127.8 m by its current total number of share of  about 780 million after the 1 for 1 bonus issue, quarterly earning per share is 16.38 sens. Together with its first 3 quarter earning of 27.22 sens (after bonus issue adjustment), its earning for 2014 is only 43.6 sens a share, which is still very good, then why the sharp drop ?

If we refer to its explanatory notes to the financial result we can see that there is an one-off item of Rm 88.2 million from 'fair value adjustment of investment properties' in its 4th quarter earning. Without this one-off item its earning should be about 8 sens a share.

If we look at its revenue generated from its normal business operation from 1st to 4th quarter, the figures are Rm 207 million, Rm 220 million. Rm 206 million and Rm 166 million respectively. Its current quarter of Rm 166 million is 21.3% less than its first 3 quarters average of Rm 211 million. I think that is the reason for 16 sens drop on Friday.

Purely on chart, it is possible that its sub-wave iii has ended.

It is also possible that the current pullback is a mini-wave 1, if it can move up again next week but I think is unlikely.

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Dow and the Chinese Zodiac.

Chinese Zodiac

The following table is a summary of Dow's annual performance in percentage from 1946 to 2014. For example, in 1946 (Dog year), it lost 8.1%. In 1947 (Pig Year) it gained 2.2% and in 1948 (Rat year) it lost 2.1% and so on.

Since 1946, Dow gave the best average return of 17.6% during 'Sheep Year'. Next best is the 14.8% return during 'Ox Year' followed by 13.8% during 'Pig and Rabbit Year'.

Only two animals in the Chinese Zodiac gave negative average return, the Rooster with negative 4% and the Rat with negative 1.7%.

If Dow can gain 17.6% in 2015, it should reach 20,800 by 3rd February 2016, the last day of the current 'Sheep Year'. Dow gained 14.9% during the 'Horse Year' that has just ended 3 weeks ago.

However if we were to look at Dow's performance earlier than 1946, we would notice that the '1929 Great Depression' started during the 'Snake Year' and Dow recorded its biggest annual lost of 52.7% during the 1931 'Sheep Year'.

As I have mentioned before, stock market behaviour can be highly unpredictable at times. The market can plunge at the most unlikely hour when you are most comfortable and bullish. I might have presented the following projection for FMBKLCI in my previous posting but I am always on the lookout for danger signs and are ever ready to run for my life at any point along the two years journey to January 2017.

Be prepared for a failure 5. It may not happen but it can happen. Don't forget Murphy's Law. Just keep our fingers crossed and pray that wave 5 will be well behaved and can last until 2017.

Dow (18,209)

Dow closed with another new record high on Tuesday. If Dow continues to move higher from this level, then it is forming the sub-wave iii of its wave (xiii).

But if Dow starts to move lower from this level, it is forming a higher degree a-b-c-d-e corrective wave (xiv).

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