Latest thoughts on the market from our chartist Ploy!

The SET slightly breached above the barrier at 1,190-1,200 ( which was given here last week) yesterday. It is likely that the SET may continue its rally, heading up towards 1,231-1,235 by late this month to Songkran festival. The supports are now at 1,174-1,170 and 1,160. The major stoploss line is shown in the chart below, with this week’s stoploss line at 1,150.

After there was a signal to cut back partly last Tuesday, adding to the position is not recommended until the SET can breach above 1,205. This is because we are trading at the quarterly resistance, which is significant. The SET tested this same resistance twice in the past and couldn’t breach it. We have to wait and see whether this resistance can be breached. This resistance is around 1,205 for this week. However, if the SET can’t breach this barrier, the downside gap may be quite steep.

The US dollar index, after making a sharp rally last week, has hit its X-resistance and may continue to head downward, with support at 79.07. This negative outlook in the US dollar index may help push the global equity markets up. The index’s rebound will face the barrier at 80.57-80.67.

Meanwhile, the U.S. stock markets will have some upside gaps before hitting their resistances. On looking at the charts below, the Dow Jones faces barrier at 13,700-13,720 and the S&P at 1,480-1,500. While we enjoy the rally, watch both barriers as well. Last time both indices hit these barriers was the Subprime crisis.

In sum, enjoy the rally and add more to the position on the SET’s breakout above 1,205. You may want to pay attention to those stocks in the Bank sector (the sector’s resistance is at 480), and some second-tier banks like TCAP, TISCO, and KK. Also apply caution that we are trading at the quarterly resistance as the situation is more of hi-risk-hi-return.

Thanks again Ploy! Please feel free to contact her directly at ploy@thaicapitalist.com