• Rangebound market as awaiting Britain’s fate in EU: US stocks seesawed overnight as investors waited for tomorrow’s referendum on Britain's membership in the European Union. The latest opinion polls showed neck and neck race.
• Any rise offering profit taking opportunity: As investors are cheering Britain to remain in the EU, a positive outcome would send stocks higher but gains would be short-lived since investors somewhat already digested the move and would shift focus to Fed’s rate hike outlook. We thus see any rise as profit taking opportunity after the SET has traded at demanding valuation above 15x forward P/E. The shortterm target is set at 1400 points and investors should set a stop-loss at 1395 points. Today’s trading range is expected to within 1412-1435 points.
• Corporate earnings set to put in play after Brexit referendum: Preview earnings reports are likely to be released over the next 1-2 weeks. As the banks’ 2QFY16 earnings are being questioned as well as its future performance, an outlook downgrade would cause the SET index trading at more demanding valuation in terms of forward P/E and that could cause institutional and foreign investors to stay sideline.
• Short-term investment strategy: Any rise still offers an opportunity to take profit and any pullback is a buy.
(1) Tourism recovery play: Hold onto AOT shares.
(2) Selective play: Hold onto long positions in TK, PTTGC and short positions in THAI.
Source: poems.in.th / settrade.com
