• The world’s crude oil price soared sharply while institutional investors were significant net buyers of equities last Friday. Both elements are likely to help buoy the market today. Trading range is expected to be within 1360-1385 points whereas the upside for this cycle would be capped at 1400 points in light of weak earnings outlook.
• West Texas Intermediate increased to near US$40 again after EIA reported US crude production declined. The upcoming oil producer meeting at Qatar on April 17 however is needed to follow up.
• The SET declined to trade at FY16 P/E around 14.5x-14.6x, equivalent to 1355-1365 points, which was an average level where institutional investors previously scooped up shares. However, the upside for this cycle would be limited around 1395-1400 points, pressured by looming downgrade of earnings projection. The bank sector is expected to kick off the earnings season from April 19 onward.
• For short-term strategy, trading range of stocks that will benefit from the government’s stimulus measures e.g., tax incentives during Songkran Holidays Festival and mega infrastructure projects. Note to keep equities at 40%-60% of investment portfolio.
(1) Tourism recovery play: Let profits run on long positions in AOT, CPALL and SPA.
(2) Momentum trade: Go long JAS and CK for speculative trading.
Source: poems.in.th / settrade.com
