Weekly Charts – SET, DJIA, THB/USD

Latest thoughts from our resident queen Chartist Ploy, in summary she’s look at:

1. World equity markets rallying until Xmas

2. Keeping an eye at the USD/THB rate as it will dictate the movement of the market.

Last week was amazing.

The SET breached above 2 barriers last week, which are the barriers at 989 and 1,000. Such a rally coincided with the fact that the Baht/Dollar exchange rate had backed down from the resistance, forming a peak which also marked a ‘low’ point in the SET. The Baht may continue gaining strength against the Dollar, and may reach 30.45 baht/dollar. This points that the SET may head up higher.

Many have been asking how far the SET can go. My approximation is around 1,050 for now. If the SET can breach above 1,050, the next barrier is around 1,075. The support is around 1,020-1,014.

How long will the rally last? That depends mainly on the US dollar index. Most of the time, the stock markets move in the opposite direction of the US dollar index. And, the US dollar index has backed down from its resistance and may head down toward 76.40-76.35 or lower at 74.72. In term of timing, there is a cycle support in the US dollar index, which falls around the 27th of December. That means the US dollar index may continue falling until the 27th of December.

 

The cycle of the US dollar index matches the peak cycles in both Dow Jones and Hang Seng. In terms of timing, both indexes may rise until around Christmas, which is the cycle resistance.  However, while the SET has breached above its down channel, both the Dow Jones and Hang Seng have not yet breached their down channels. The barrier against the Dow Jones is at 12,187, and Hang Seng at 19,800.

 

In sum, the world equity markets may rally until Christmas and the US dollar index may fall until Christmas. Consider this as your early Christmas gift and you may enjoy trading, locking in the profit, while humming “Joy to the World” along the way. However, once the Christmas is near, I would like you to be more careful and hold more of the cash to wait and see how things turn out after Christmas. The stoploss line for the SET is around 1,014 for now, but the figure may be revised again. 

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

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