Strategy:
The SET has increased quite sharply in the last round of rallies. Moreover, the index begins to swing wildly within narrow range in the last 2-3 weeks, while there is no fresh catalyst to provide support. Given that, FSS expects the SET to retreat in the near future and recommend that investors wait to buy on weakness. By contrast, if the index increases, particularly to 1420 or above, we suggest that investors sell in order to trim portfolios and hold cash.
Technical stocks: DIMET, ECF, IVL(short)
Market direction:
The SET remained volatile after the index continued to open higher because there was no fresh catalyst to provide support. Given that, the SET moved within the range seen since last month before there was selling that pressured it again in the afternoon after there was news that bombs exploded at an airport and a subway station in Belgium. Nonetheless, buying returned to the market at the close after the situation did not escalate. Although FSS believes that such incident has limited impact on Thai economy and equity markets, it might hurt investment sentiment in risk assets in the near term. Specifically, investors might want to wait for clarity. Furthermore, the market lacks fresh catalyst to provide support after the SET has rallied lately to reflect positive news. Meanwhile, Asian equity markets begin to see more limited upside, while many retreated. As a result, FSS expects the SET's gain to also be limited. What's more, investors need to be cautious about selling to lock in profit and to reduce risk from market volatility, which will pressure the index to fall as we have anticipated. For these reasons, we recommend that investors wait to buy on weakness. Specifically, we expect the index to fall to build up base for a new round of rallies.
Support 1393-1387 , 1380-1376
Resistance 1400-1402 , 1405-1407
Source: fnsyrus.com / settrade.com
