No bad news in sight: In our view, there seems to be no additional major factors that may shake the market over the next 1-2 days but there still remains a number of key market-moving factors in store ahead, starting with ECB rate decision and OPEC meeting on Jun 2 though oil prices are now showing signs of stabilizing.
SETI’s attempt to break through 1420/1430-point psychological barriers: The SET index closed above a key resistance level on Mon in trading volume that exceeded monthly average. The market’s rally reflected low expectations that the Fed would pull the trigger on its next rate hike in Jun but the baht however remained on the defensive. From our viewpoint, the current trading level of the SET index at 15.5x forward P/E may not be a good buy-in point to chase prices but it is seen only for short-term speculation.
Valuation no longer cheap: Statistics showed that the market’s forward P/E reached the year’s peak of 15.7x last year, equivalent to the SET index level of 1439 points, which leaves little upside room from current trading levels while the risk also seems skewed to the downside rather than the upside as a lack of buying support from key investor groups may make the high-flying market more sensitive to negative news flows and vulnerable to the risk of a sharp correction in the absence of fundamental support to sustain the market’s rally. The trading range for the SET index is expected to be between 1410-1430 points today.
Trading strategy: In the near term, the strategy is to be selective in stocks and avoid chasing prices. For long-term investment horizon, any big market dips should be taken as a buying opportunity.
(1) Tourism recovery play: Hold onto AOT shares.
(2) Selective play: Hold onto CHG shares.
(1) Tourism recovery play: Hold onto AOT shares.
(2) Selective play: Hold onto CHG shares.
Source: poems.in.th / settrade.com
