Weekly Charts – SET, Brent, THB/USD

Latest thoughts from our resident queen chartist Ploy. She still thinks that the market will continue to rally but that we should keep our eyes at the Brent and THB/USD exchange rate.

While most Thais are busy with the flood, it seems that the foreign investors are buying the SET. The volume from these foreign investors, along with positive signs in world’s equity markets may help push up the SET a bit higher.

 

I’d like to reiterate that I still maintain the view that the SET may rebound until mid-November and the indicator we should keep eyes on is still the Brent oil price. However, there is a minor change in the barrier the SET has to pass before heading any higher. The 1,030-1,035 resistance I gave you 2 weeks ago is now revised to 1,000-1,008. The change is due to the declining slope of the resistance line. If the SET can stay above 1,000-1,008, you may buy a bit more aggressively and in such case, it may head up toward 1,024-1,025. Meanwhile, do limit your trading and have a stoploss line at 954. That means, if the SET falls below 954 intraday, I’d love to see you cutting the portfolio by up to 40%.

I also maintain the view that the Brent oil price may head down to test its support at 101-99. I will keep you updated on that as it is the risk against the SET right now.

Another indicator I’d like you to look at this week is the exchange rate of Baht and US Dollar, which is a backup for the SET. I plotted the SET with the Baht/USD and found that the strengthening Baht is associated with the recovery in the SET.  If the Baht continues to strengthen against the US Dollar, it will support the further rebound in the SET. The Baht may strengthen against the US Dollar up to 30-29.75 Baht/USD.  I will cancel this view if the Baht weakens and stays above 31.00 Baht/USD.

Another backup for the SET is the world’s equity markets. TheFrance’s CAC40,Germany’s DAX, andJapan’s Nikkei have breached above the barriers I gave you last week. That is a positive sign for the SET. This week, watch the barrier in the S&P index, which is at 1,323. If the S&P index can stay above 1,323, it will signal that more upside is likely.

Since the foreign investors are buying the SET right now, you may consider trading blue-chip stocks, like those in the Bank sector and Energy sector. The barrier of the Bank sector is 373 and 383-384, the Energy sector at 20,331, the Petrochemical sector at 1,098-1,100. If you ask me, the stock I am especially keen on now is TOP. TOP is rebounding relative to the Refinery stocks and the Energy sector. TOP’s resistances are at 60 & 61.50 & 65-66; support is at 57 & 55.

In sum, add more to the portfolio on SET’s breakout above 1,000-1,008, but do have stoploss line at 954. Keep eyes on the Brent oil price while the Baht/USD rate may be a backup for the SET at the moment. 

Thanks again Ploy! You can contact her at ploy@thaicapitalist.com

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