Our chartist Ploy is back with her latest thoughts on the US dollar Index, DJIA, SET Index and the impact of foreign fund flows on the SET Index.

The SET stalled within 1,190-1,200 range last week, but this week, it is likely that the tumble in the US dollar index may help prop the SET up. The US dollar index has fallen below 79.07 and may head down to 78.10 and 77.50-77.35. This will add positive odds to the global equity markets. In case of rebound, resistances are at 79.35, 79.95 and 80.25-80.40.

On the US side, the resistances in Dow Jones and S&P remain at 13,700-13,720 and 1,480-1,500, as given in my last comment (http://www.thaicapitalist.com/2012/03/charts-weekly-5/#more-1370). I still maintain the view that both indices will head up to test those barriers. The outlook will turn bearish if the Dow Jones closes below 13,000 and S&P closes below 1,386.

The rally in the SET may extend towards 1,240-1,250 (revised up due to the rising slope), with supports at 1,195-1,194 and 1,187. This week’s resistances are at 1,209-1,210 and 1,214. The market will turn bearish on the index’s falling and closing below 1,179. Therefore, I advise that, this week, investors should use 1,187 to sell partly of their portfolios and 1,179 as major stoploss line.   

I would like to reiterate that we are still trading at the long-term, hi-risk-hi-return resistance, as shown in the quarterly chart below.

As for the concern about fading foreign volume, there is a chart of foreign volume in Apex, but please note that the figures on the right axis are not relevant, and we normally use this chart to watch the direction of the foreign volume only. The rising line means foreign investors’ net-buy position, and vice versa.

The chart shown below states that foreign investors are still buying, but their volume is reaching the Q-resistance. A breakout above this Q-resistance will be bullish for the SET, and means that the buying may continue. A sharp tumble from this resistance means significant selling may follow. I think we will see the outcome at the Q-resistance after Easter. Happy egg-hunting.  

 Thanks ploy! If you have any questions please do not hesitate to contact her directly @ ploy@thaicapitalist.com