Latest thoughts from our resident chartist Ploy.

The US dollar index almost gave us a heart attack when it breached above the barrier at 79.54 last week. However, it couldn’t breach above another key barrier at 80.50: it turned around and head downward, with support at 78.50-78.30. If it falls below 78.30, it may head down to 77.20-77. I maintain my view that the US dollar index will become a threat to the global equity markets on its breakout above 80.50.

The Baht/Dollar exchange rate, which concerned me last week, shows sign of continual falling, and it may head down to test the support at 30.50-30.45. The said support is the point where we have to observe the rate’s reaction. If the Baht/Dollar exchange rate rebounds sharply from that support and breaches above 30.89-30.92, it may cause a sharp fall in the SET.

My view on the SET remains relatively the same. The SET is heading up to test its previous High at 1,148.28. The higher target is around 1,185-1,188, which is revised up from last week’s target due to the rising slope. Support for short-term volatility is at 1,125-1,120. If it falls below this support, it may become highly volatile, heading downward to 1,102-1,100. You may use 1,120 as a signal to cut back a part of your portfolio.

On looking at the SET relative to the US dollar index, the SET may out-perform the US dollar index for another gap after it has breach above the down channel, shown last week. The potential upside gap is shown in the chart below.

Thanks ploy! If you have any questions feel free to contact her directly at ploy@thaicapitalist.com