• Wall Street down slightly with oil prices: As US stocks and oil prices were little changed on Thu, we believe Thai stocks today could be in a waiting mode for fresh leads ahead of the BOJ and the US Fed’s policy meetings next week and the Brexit vote in the following week. It seems to us that the SET index may not go anywhere far after dashing expectations of a Jun rate hike by the Federal Reserve have pretty much been priced in.
• Foreign buying continues but inflows now seen limited: Foreign fund inflows continued into the region but are likely to be limited. In this sense, investors should watch out for a possible bout of profit-taking by foreign investros especially after the end of the Fed’s policy conclave next week.
• Upside seen limited, range trading strategy in focus: As the SET index is now trading far above 15x forward P/E, we think the room for further upside would be limited and it may morph into a sideways trading range before a correction ensues after the earlier key market drivers lost steam following diminishing expectations of a Jun Fed rate hike and the slowing pace of the rally in oil prices. To play current market conditions, range trading strategy looks appropriate with a clear stop loss. The trading range for the SET index is seen at 1426-1443 points today. A possible break below this support level could set the index up for a further pullback towards 1412 points.
• Trading strategy: In the near term, the ’sell the rallies and buy the dips’ approach on a selective basis looks appropriate. For long-term investment, any big market dips should be taken as buying opportunities.
(1) Tourism recovery play: Hold onto AOT shares.
(2) Selective play: Hold onto CHG and TK shares and short positions on THAI shares.
(2) Selective play: Hold onto CHG and TK shares and short positions on THAI shares.
Source: poems.in.th / settrade.com
